posted Saturday 28th August
Pre-open Monday 30th August
There was an obvious Response from the Buyers last week – as anticipated at the start of the week. I marked four instances of Significant Buying (green) and one instance of Significant Selling.
Last week’s price action has lowered the VAL (from start May) to 1053. If ES is set to move higher then I would anticipate that probes below that level will be seen as opportunity by Significant Buyers. The poc for this four month price range has settled for now at 1073 which is the most important reference level at the start of this week.
Longframe: Long positions are still eliminated for me. The ChartProfit Market Timing System stayed negative for the seventeenth consecutive week. I remain cautious about long positions until this turns positive and Value is printed above 1073.
Dayframe: The last imbalance is now Buying (green) and that eliminates new short trades for me. Intraday support/resistance at 1065.25 (1/2R off July low) would be ST bullish/bearish.
Sentiment: Mutual Fund Flow data shows lots of bears which is contrarian bullish. My version of the Rydex Assets Ratio was down to 0.95 (from 1.09) on Friday and amgdata reported another weekly Equity Fund Outflow of -$4.6 Billion. And as I have already mentioned the AAII (public) poll showed Bears outnumbered Bulls by 2 to 1. This further reinforces the idea that downside is limited.
Supporting Charts
– USDJPY: New multi-year low last week. PriceOsc positively diverging and ticking up.
? EURUSD: Has stalled at 1.26 (1/2R off June low). Bulls would want to see this support hold. Breaking below this level would indicate further weakness.
– UDX: PriceOsc higher for 14 consecutive days.
? TLT: broke out above the 1/2R level at 105.22 but big down day Friday brings it back to that support. Break below would be bullish for equities.
imo these charts are mixed for equities but could turn bullish.
