Pre-open Monday 3rd May
Last week I marked two instances of Significant Selling and no Significant Buying. This was the first Significant Selling in six weeks.
As noted pre-open Friday, the poc (from the start of April) migrated to 1202.50. Early in Friday’s session ES formed a lower intraday high at that level and sold off sharply to the 20day poc at 1183.50.
1202.50 remains the First Level Resistance at the start of this week and 1183.50 is the First Level support. Consolidation below 1183.50 early this week would indicate further weakness – most likely down to next major support at 1161.50. Note also Tuesday’s red-at-bottom low. It is unusual to see red at the low of any decline so until I mark Significant Buying again (green) I will assume a test of that low is likely.
Longframe: CP Market Timing System (weekly) is positive for all U.S. Market charts. UK Market chart is now neutral.
Dayframe: Sellers are in control.
ST sentiment: My version of the Rydex Assets Ratio hit an extreme high of 3.4 on Monday and ended the week at 2.9; down just slightly. The Rydex timers are optimistic and confident that holding on will bring reward. That is not ST bullish.
LT Sentiment: The Investors Intelligence (newsletters) Poll reports three times the number of Bulls to Bears. That has to be a concern. It’s a rare occurence and the last two times the ratio was above 3 were October 07 and December 09.
Supporting Charts with important levels:
+ USDJPY prints above the 93.60 1/2 level.
– EURUSD still in a weak position and momentum is down (PriceOsc)
– UDX prints above support band 80.15-80.30 and daily price osc is moving higher.
– TLT and IEF broke above their important poc levels (91.25 and 90.50 respectively) and daily price osc are moving higher.
In the main these charts are bearish for equities
