posted 9.29 a.m. est
Pre-open Monday 23rd August
Longframe: The Chartprofit Market timing system remained negative for the sixteenth consecutive week. The market is most likely in ranging mode. Sentiment indicators are mostly unhelpful at the moment but Mutual Fund Assets indicators suggest that downside is limited. e.g. amgdata.com reported Equity Fund Outflows last week of -$9.1 billion. An outflow as large as this in a single week is usually a strong indication that downside is limited in the near term at least.
The Value Area calculated from start May currently shows ES VAH at 1120 and ES VAL at 1058. These are the LT reference levels. My assumptions at the moment are as follows:
Acceptance above 1120 would be Bullish and acceptance below 1058 would be bearish. i.e. trends would develop.
If there was a price probe above 1120 it would likely find resistance at 1126.5, the 1/2 Bear Market level for the ES continuous chart.
If there was a price probe below 1058, (especially early in a session) Significant Buyers would respond especially if the probe was down to the low 1040’s.
Dayframe: ES may well continue to find 1073 an attractive level at the start of the week. If so this would most likely be ST negative.
Supporting Charts
– USDJPY: New multi-year low recently and very little bounce since.
– EURUSD: PriceOsc lower, ie momentum is down. Support just above 1.26 (1/2R off June low)
– UDX: PriceOsc higher for 10 consecutive days.
– IEF: Last week IEF reached the highest level since Jan 09.
imo these charts are not positive for equities at the moment.
