pre-open comment Friday 28th June
Thursday generated another higher but narrow Value Area. ES has approached the 1/2R at 1616.75 but has not yet exceeded it. Some of the major charts have also approached the given Resistance (see below) but only IWM has exceeded its 1/2R and has probed its 40dy poc at 97.87 (next resistance on this chart). IWM (small caps) is the leader and that’s usually healthy.
1/2R of May high Resistance levels as follows: ES 1616.75; SPY 162.40; DIA 150.14; QQQ 72.05; IWM 97.10
All four maj stock index ETFs have seen Momentum (although negative) turn up.
%Stocks>50dyma numbers: Nyse 42%, Nasdaq 59%, R2000 57%. Numbers >50 are considered supportive.
Resistance = ES 1616.75 (1/2R off may high)
Support = ES 1548 (11mn poc)
Sentiment: My version of the Rydex Assets Ratio was almost unchanged at 2.70. Wednesday’s ratio at 2.62 was a multi-month low. From a contrarian perspective this is worth noting. The previous significant market correction ended in mid November with the Ratio as low as 2.57 at that point. Other sentiment measures indicated a sharp increase in Bearishness this week (more in today’s webcast).
Supporting Charts
Bonds TLT: On Monday charted printed its lowest level since Sep 2011.
Oil USO: Closed back above the 34.20 area of S/R. Momentum is positive but has turned down.
Gold GLD: On Thursday printed its lowest level since Aug 2010.
Silver SLV: On Thursday printed its lowest level since Aug 2010.
Dollar Index: Held maj Support which is the major poc at 80.15. Momentum is up and close to turning positive.
EURUSD: Momentum is down and close to turning negative. On Wednesday broke below the minor Support at 1.3081, 1/2R off April low. Next Support is the maj poc at 1.2777
