posted 08.55 a.m. est
Pre-open comment Thursday 22nd May
Tuesday’s Aggressive Selling imbalance saw no follow-on and in fact yesterday, I marked Aggressive Buying (green-at-top) . What I hadn’t realised when I wrote yesterday’s pre-open was that price action over the previous few hours had already lifted the major poc to 1872. This makes yesterday’s pre-open comments very relevant (highlighted). As Thursday’s Value Area was generated entirely above that poc we can say that if ES holds 1872 it is in a very strong price location. 1872 has increased in importance so price back below this First Level Support would be a concern especially as directional moves are often preceeded by a migration of a poc level. Other analysis like Breadth numbers is less positive, see below, and Bulls would want to see these improve quickly. I’m seeing IWM as a key chart/level here, see below.
First Level Support = 1872.00 (4mn poc)
Major Support = ES 1835.50 (maj poc)
Index ETFs, Pre-open: Key Chart IWM is printing below 111.48 (12mn poc), SPY is printing above 187.73 (major poc), QQQ is printing above 86.32, (8mn poc) and DIA is printing above 163.40 (2yr poc).
Stocks>50dyma numbers: Nyse 47% (from 42%), Nasdaq 27% (from 25%), R2000 28% (from 26%). Numbers >50 are considered supportive.
Sentiment: My version of the Rydex Assets Ratio was higher at 7.10 which is historically a high number. The highest being 8.39 on 03/13.
Supporting Charts (+ or – shown as implied bias for equities)
– KEY Chart Financial Sector XLF: pre-open 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: last week printed its highest level since June last year.
Dollar Index: printing above the maj poc at 79.76, having recently tested last year’s low (78.92).
Gold GLD: Pre-open GLD is printing above 124.12, its two year poc.
Oil USO: is now printing above 37.31, the 1/2R off 2011 high, and yesterday reached its highest level since September.
EURUSD: chart recently printed its highest level since November 2011. That test above the March high was rejected though and chart has fallen to the 1.3673 Support (12mn poc) where it has stalled.
