posted 9.28 a.m. est
Pre-open Monday 24th May
Same structure last week as previous week. Relative strength early in the week and relative weakness late in the week. This is typically a bearish weekly structure (see last Monday’s comment, left). I marked two instances of Responsive Buying last week and two instances of Aggressive Selling which followed Responsive Selling on Tuesday. Friday’s Responsive Buying was not Effective (Value Area was overlapping/lower and wider).
1094 is the obvious and most important resistance at the start of this week. If ES can print some value above this level early in the week it would be in a stronger position. Long side is eliminated for me on any timeframe until I mark Effective Buying above 1094.
ST sentiment shows enough fear for an ST low (see below) but the price location is very weak. If ES remains below 1094 then another sharp sell-off is a possibility despite the oversold/overbearish situation. If ES attempts to rally but finds resistance around 1094 then the odds increase of further weakness ahead.
ST sentiment: My version of the Rydex Assets Ratio reached 1.1, the lowest level since July 2009. The ISEE (equity only) Index 10dayma hit a six month low and the OCC Calls% 10dayma reached its lowest level since Jan 09. Intraday on Friday the VIX spiked above 48, the highest reading since March 2009.
Supporting Charts (technicals based on daily Price Oscillator)
? USDJPY: currently prints above the 90.40 poc. Price Osc dn for 9 days.
? EURUSD: Trend down but Daily Momentum was up for third day.
– UDX: currently printing above the daily chart resistance at 85.14
– TLT & IEF: Strongly up. IEF hit a new 12 month high late last week.
these charts are not supportive of equities.
