Pre-open Monday 25th January
Friday’s Value Area was lower and wider on increased volume. Again that’s Effective Selling. ES spent plenty of time below 1108 early in the session and as anticipated that price action was followed by a decline down to test the major poc at 1094. Those levels are important. 1094 could well be support this week at least initially and 1108 should now provide a significant level of resistance if there is further weakness to come.
Sellers are now in control of the dayframe and we need to see plenty of evidence that the Buyers are regaining control before looking at the long side of the market. I would at least want to see Effective Buying above 1108.
There was no panic in the ST sentiment indicators on Friday. In fact the Rydex Bull fund assets I follow saw an increase on Friday with a slight decrease in the Bear fund assets – that is not panic or anything like it from the Rydex mutual fund timers. They remain fairly calm with my version of the Rydex Assets ratio at 2.875 which is still high. From a contrarian pov they is not yet bullish.
