Pre-open Friday 8th January
Early in the week ES built value around 1129 establishing “a good reference level..for short term traders”. There was a price probe below that level early in yesterday’s session which was quickly rejected setting up a rally through to the close. I marked Significant Buyers (green-at-top) for the first time in twenty days which suggests continuation higher.
In the longframe sentiment indicators are suggesting the market is getting overheated, e.g. yesterday VIX closed at its lowest level since August 2008.
Short term public sentiment measures were mixed yesterday. The Rydex Bull fund assets that I follow were slightly down but Bear fund assets were sharply up which resulted in my version of the Rydex Assets Ratio falling sharply to 2.0 on Thursday. But the ISEE (equity only) index settled at 231 following a previous reading of 230 – these are high numbers.
Mixed enough to suggest the market may not move fast in either direction but if ES can hold above 1129 I have to favour the upside and will not consider shorts at this point.
