posted 9.22 a.m. edt
Pre-open comment Friday 26th August
I’ve dotted in last week’s high and low. You can see that this week’s price action has done very little so far to suggest the Weekly Price Structure analysis will turn positive by the Close today. w/e 5th Aug was an Effective Selling week and this week is the third week since then of lower ranging price action with very little conviction from the Buyers – they have managed to close the gap left last week but that is all.
Significant Sellers Responded right off the Open yesterday (red-at-top) and that now eliminates the long side for me. ST analysis is once again lining up negatively with the LT analysis. Time below the 30dy poc at 1134 would suggest further weakness.
First Level Support = 1134 (30dy poc) (SPY = 114.25)
Major Support = 1094 (MAJ LT poc) (SPY = 109.38)
LT Sentiment: AAII (public) poll reported Bulls% up slightly at 36.4 and Bears% also up slightly at 41%. This leaves the net almost unchanged at -4.6 which sits in the middle of its 6month range of readings, a little complacent. lipperusfundflows.com reported Equity Funds (inc ETFs) showed a net weekly inflow of $2.1 Bil to 08/24.
ST Sentiment: My version of the Rydex Assets Ratio was down slightly to 1.39. Monday’s ratio at 1.10 was the lowest reading since Sep 2010 (an extreme reading and would usually suggest that downside is limited).
Supporting Charts (+ or – or ? for equities).
+ EURUSD: prints above the band of maj LT support between 1.3920 to 1.3965 and currently, as I write, just above the 1/2R off May high at 1.44.
+ Dollar Index: Currently printing below the 74.96 poc.
– TLT: Sharply lower over last two days but still printing above the major 1/2R off the 2008 high at 105.22.
imo it is difficult to imply a bias for equities in the ST from these charts.
