Pre-open Thursday 18th February
Wednesday generated a very narrow Value Area and very low volume (22 day low). That’s two consecutive days of narrower Value Areas and less volume so this is not obviously facilitating price higher.
Although Wednesday’s price action took place mainly above 1094 enough time was spent at that level to cause the major poc to migrate back up. A major poc migrating lower and then back up is usually a bullish development but in light of this week’s price action (described above) I would definitely want to see a day of Effective Buying above that level to confirm that Buyers are back in control of the dayframe. Also remembering that the NYSE Weekly Market Chart is still negative (red).
dayframe: most important level is same as longframe and that is the major poc at 1094. If ES struggles to hold above this level after the open then I would expect further weakness. Last imbalance was Buying (grren-at-top on Tuesday).
Other charts to watch: Dollar index closed above its major half level and EURUSD is printing close to recent lows. Dollar strength would most likely make it difficult for stocks to advance.
ST sentiment: On Wednesday my version of the Rydex Assets ratio was up slightly to 1.4
