posted 9.28 a.m. est
Pre-open Friday 22nd October
Thursday’s Value Area was overlapping/wider but once again almost all the session was spent consolidating above the First Level S/R at 1172.50 which keeps ES in a strong location. The overnight low was 1173.25, just above that First Level Support, and currently pre-open ES prints around 1179.
Responsive Sellers yet to make aan appearance and no confirmed weakness despite the various divergences I’ve outlined in the webcast.
Dayframe: Structure of the week so far appears to be consistent with the typical Bullish pattern we’ve seen over the last few weeks of relative weakness early in the week and relative strength late in the week. Therefore if ES holds 1172.50 early in the session we could reasonably expect strength to finish the week.
First Level Support: 1172.50 (minor poc)
More important support: 1155.5
ST Sentiment: Pre-open Wednesday I said that “if ES manages to retest Monday’s high enthusiasm is likely to increase fast which would be a problem”. We saw the re-test on Thursday (it did not hold) but actually my version of the Rydex Assets Ratio, as good a measure of ST Sentiment as I have, was down slightly from 1.87 to 1.85. The AAII (public) poll came in with 49.6% Bulls (up from 47.1) and 25.2% Bears (down from 26.8). This gives a nett of 24.4 which is the second highest reading since early January (highest being five weeks ago).
Supporting Charts
– USDJPY: actually this chart printed a new low on Wednesday this week.
? EURUSD: Major 1/2R at 1.3965 (off the 2008 high) in play. Chart printing at that level as I write. Price Osc down for eleven days now.
+ UDX: New ten month low last week.
+ TLT: new two month low for this chart last week. Price Osc down for ten days now.
imo these charts have a positive bias for equities.
