Pre-open Friday 22nd January
ES spent very little time above 1135 after the open on Thursday before Significant Sellers responded (red at top) and auctioned price quickly lower. In fact quickly below the poc support at 1129 and down to the next level of support at 1108. The Value Area was lower and wider on increased volume so this was a day of Effective Selling and the first for nearly three months.
Sellers are in control.
Yesterday’s price action did not seem to panic the Rydex investors. There was no rush out of Bull funds into Bear funds – my version of the Rydex Assets Ratio was down (from extremely high) to 2.5 which is still high. From a contrarian pov this is not yet bullish.
1129 now becomes a level of potential resistance. I would expect a test of Thursday’s red-at-bottom day session low 1110.25. If ES builds value (time spent) below 1108 I would expect a move down to 1094 which is the major poc (support) off the July low.
