posted 9.28 a.m. est
Pre-open Thursday 31st July
Tuesday’s red-at-bottom low was tested yesterday with more Aggressive Selling (red-at-bottom) which now indicates that Wednesday’s low will be tested during today’s session.
First Level Resistance today is the minor poc at 1039. First minor sign of strength will come if ES can print some value above this level.
I cannot consider longs on any timeframe and sentiment (see below) doesn’t look right for a low yet. However, Supporting charts (see below) suggest that maybe a turn is coming and ES 1015-1020 is a very good price area for a low. I’m thinking that a further decline could bring out the Responsive Buyers here but too risky to play for.
ST Sentiment: My version of the Rydex Assets Ratio was slightly down again from 1.43 to 1.29. This doesn’t yet look like the capitualtion I would expect to see from the Rydex timers at a low. I would expect a ratio nearer 1.
LT Sentiment: Investors Intelligence Bulls were unchanged at 41.1% and the Bears were only slightly higher at 33.3% (was 31.1).
Supporting Charts (technicals based on daily Price Oscillator)
– USDJPY: new six month low on Wednesday.
+ EURUSD: I’m calling this positive for equities for now because a higher low looks to be forming based on the 1.2133 major halfway level. Breakout above the June high will confirm this and would look bullish.
? UDX: Chart to watch. Break below the 85.14 poc support will also confirm EURUSD strength and imo be bullish for equities.
– IEF and TLT were higher again with rising Price Osc. Price Osc is diverging negatively with price – turning down will confirm.
imo: these charts are mixed but suggest there could be change coming.
