posted 08.28 a.m. est
Pre-open comment Thursday 15th May
Aggressive Selling was marked on Wednesday following the Reactive Selling on Tuesday. With the Value Area generated near the high of the day’s range this is not convincingly Effective Selling but these red-at-bottom lows are tested within a day (or two) 80% of the time. Only Significant Selling marked below 1872 would be a sign of weakness in the longer timeframe.
Breadth numbers deteriorated again yesterday and although SPY, DIA, QQQ have held their strong price location, Key Chart IWM (SmallCaps) is back below 111.48 (12mn poc). Supporting charts indicate a negative bias for equities, see below.
First Level Support = 1872.00 (4mn poc)
Major Support = ES 1835.50 (maj poc)
Index ETFs: Pre-open, SPY is printing above 187.73, the 7mn poc, IWM is printing below 111.48 (12mn poc), QQQ is printing above 86.32, the 8mn poc and DIA is printing above 163.40 (2yr poc). As mentioned yetserday Momentum (PriceOsc) is down for all four.
Stocks>50dyma numbers: Nyse 51% (from 57%), Nasdaq 24% (from 29%), R2000 28% (from 36%). Numbers >50 are considered supportive.
Sentiment: My version of the Rydex Assets Ratio was higher at 7.36 (from 6.44). Historically this is an extreme high reading. Only ratios earlier this year have been higher. Also I note that VIX closed at 12.13 on Tuesday which was the lowest close since August last year indicating complacency.
Supporting Charts (+ or – shown as implied bias for equities)
– KEY Chart Financial Sector XLF: is printing below its maj 1/2R level (22.04).
– KEY Chart EURJPY: chart is printing below 140.96, the 1/2R off Dec high.
– KEY Chart Bonds TLT: pre-open today has printed its highest level since June last year.
Dollar Index: rallied strongly back above the maj poc at 79.76, having tested last year’s low (78.92). Printed a 26dy high today.
Gold GLD: still printing below 127.20, its 18mn poc in a LT weak price location.
Oil USO: printing below 37.31, the 1/2R off 2011 high but has rallied off the 36.11 Support (1/2R off 2013 high).
EURUSD: Last week the chart printed its highest level since November 2011. This test above the March high was rejected though and today is probing below the 1.3673 Support (12mn poc).
