posted 9.26 a.m. et
Pre-open comment Thursday 16th February
On Wednesday I marked Aggressive Selling for the first time in weeks but although Sellers are active this was not Effective Selling – the Value Area was overlapping/higher than Tuesday’s.
Dayframe: I said pre-open Tuesday that if ES could not hold above 1346 “then this month’s VAL at 1334 may need to be tested”. Overnight low has been 1334.25. Time spent between 1334 and 13340 would probably cause the minor poc to migrate lower from 1346 and that would probably be a negative. ST Bulls would want to see ES printing back above 1346.
LT Bulls should note that Sentiment numbers have reached extremes – see below.
First Level Support = 1346 (min poc)
Major Support = 1307 (maj poc) SPY = 131.28
Sentiment: Investors Intelligence (newsletters) poll reported Bulls at 54.8%, the highest since May last year. I have noted that the recent Bears numbers from this poll (around 30%) have not been typical of a top but this number is now falling. Bears were down to 25.8%, a six month low. On Wednesday my version of the Rydex Assets Ratio was higher again to 4.86 which is the highest ratio I have in my database. Rydex traders are extremely bullish and historically this is usually a warning sign for the market.
Supporting Charts (+ or – or ? for equities).
(Momentum = daily PriceOsc)
? EURUSD: is lower and currently prints at the 3mnth poc at 1.30 and Momentum has turned down.
? Dollar Index: is higher and prints just below the important 80.15 level and Momentum has turned up.
? TLT: Chart is printing just below the 10month poc at 117.88 and Momentum has turned up.
imo it is currently too difficult to imply a bias for equities from these charts but the recent positive bias could change.
