posted 9.28 a.m. est
Pre-open Monday 2nd November
Last week I marked one instance of Significant Buying and two of Significant Selling.
There were two obvious resistance levels highlighted as important last week which represented tests of strength for the Buyers and they failed both (see graphic). The first was on Monday at the 1088.50 poc and the second was on Thursday at the 1063/64 poc.
ES had two Effective Selling days last week (Wed & Fri) where the Value Area was lower, wider and generated more volume. On Wednesday the >>Effective Selling below the 1063/64 poc..puts Sellers in control.<<
The Significant Buying marked on Thursday was a surprise but was most likely news related and short covering and as I have said price failed at the poc.
That High-on-Monday, Low-on-Friday week did a lot of technical damage (see webcast). On Friday SPY had the highest volume day since late April and closed at an 18 day low and the relatively weak small-caps (IWM) had the lowest Friday close for three months.
Public Sentiment held bullish (contrarian bearish) and Breadth is no longer supporting higher prices. The Bulls now have to prove themselves. With price at current levels I would repeat last Wednesday’s pre-open comment >>I will not look to initiate new longs until after an Effective Buying day above 1063/64<<
