Pre-open Thursday 11th February
I had a hunch at the start of the week that 1064 would become the attractive price and that has been the case. The five day poc has emerged at that price but there’s not been quite enough time spent there to cause the major poc to migrate down to that level. On Wednesday a probe above the 4dayVAH (1070) was quickly auctioned back to 1064 and this happened again pre-open today so ES is still finding this price attractive.
Significant Sellers have been resting for four days now so Buyers have had plenty of opportunity to make their mark and have not done so. Sellers are still in control of the dayframe for now.
Average weekly range is 35 points, current range for this week is 24 so an expansion of range above 1077 or below 1053 is likely this week. ST sentiment (see below) suggests higher but time spent below 1064 after the open would increase the odds of a test of Friday’s low and this would be in line with the current trend.
ST sentiment indicators: On Wednesday my version of the Rydex Assets ratio was almost unchanged at 1.22. Tuesday was a 60-day low for the ratio. The ratio has hit a 60day low ten times in the last three years and the market has rallied every time apart from September 2008 when it fell sharply in the crisis.
