posted 8.54 a.m. et
pre-open comment Monday 21st May
Chartprofit Market Timing System remained negative for all major Market Charts. Index ETFs ended the week in a very weak price location.
Weekly Structure: ES closed the week below Mon-Wed Hi-Lo Range which is Sellers Active on this timeframe.
On Friday I marked Aggressive Selling (red-at-bottom) for the fourth consecutive day and I don’t remember doing that before, certainly not in the same week. As I wrote three times last week “Red-at-bottom lows usually get tested quickly” (which they did) but four days in a row may mark a temporary exhaustion. However it would be rare to see a market low of any significance put in on a day where red-at-bottom is marked so until we see Buyers marked again I will assume that Friday’s low will be tested. As I mentioned in Friday’s webcast the maj poc is at 1307 and ES printing time below this level is very weak price location. Bulls would want to see time printed back above that level as soon as possible. Even if that happens there are still lots of negatives. I remain cautious on every timeframe.
Potential Support / Resistance = 1307 (maj poc)
Sentiment: There is increased pessimism indicated in some of the Sentiment numbers (e.g. AAII poll, ISEE (equity only) index, and VIX) but not a high enough level of fear shown elsewhere (e.g. Investors Intelligence, NAAIM, Rydex ratio) to strongly suggest a meaningful low is imminent. See today’s eBook.
My version of the Rydex Assets Ratio finished the week at 3.61. Recent lows at 3.45 on 04/27, and 3.07 on 03/13.
Supporting Charts (+ or – or ? for equities).
(Momentum = daily PriceOsc)
– EURUSD: from Friday’s webcast – Major poc is at 1.2777. Chart currently prints just below that level. Last week printed its lowest level since January.
– Dollar Index: on Friday printed its highest level since January.
– TLT: on Friday chart printed its highest level since October.
imo these charts have a negative bias for equities.
