Pre-open Friday 9th July
Thursday saw some weakness following a stronger open but there was no follow through downside. ES closed strong after a p.m. rally.
First Level Resistance is 1073 (poc). This may be a problem but if ES can consolidate above that level then I would expect continuation higher.
LT Sentiment: AAII (public poll) reported Bulls at 20.9%, the lowest net since the March 2009 low and Bears at 57.1%, the highest since the same date. History would suggest (from a contrarian viewpoint) that downside is limited for now. Amgdata also reported Equity Fund (inc ETFs) net outflow of $-11.6 Bill which is a large number. See also the Investors Intelligence data from yesterday.
ST Sentiment: My version of the Rydex Assets Ratio was up very slightly at 0.87 from 0.85. These traders got very bearish when the SP500 broke 1040 last week and are being very slow to change their minds with this week’s rally. Probably bullish (contrarian).
Supporting Charts (technicals based on daily Price Oscillator)
? USDJPY: Price Osc ticked up yesterday after twelve consecutive days lower.
+ EURUSD: higher low based on the 1.2133 major halfway level was confirmed by a breakout above the June high. Printed a new 8wk high today.
+ UDX: below the important 85.14 poc and printed a new 8wk low today.
? TLT/IEF uptrend still intact but technically overbought on the dailies with neg divergence
imo: these charts are mixed but improving for equities.
