Pre-open Thursday 25th February
Bulls made progress last week but the market currently lacks the conviction to drive higher away from the major poc (ES 1094). Once again ES is printing close to that level. In the longer timeframe all market action since early November has been centred around this level.
With the positives mentioned on Monday (see left) and continued retail scepticism about the markets prospects (Rydex Bull fund assets I follow were down 11% yesterday) it would have been reasonable to expect more from the Buyers than we’ve seen so far this week.
Dollar strength is a problem for equities:
EURUSD chart shown yesterday – weak chart
Dollar at strongest against GBP since May last year
Dollar index holding well above the major1/2 level shown in eBook and looking to move higher.
ES 1094 was area of support on Tuesday/Wednesday (see chart) but pre-open today ES is below that level. Things start to look bearish short term if that level becomes resistance and confirmed with Effective Selling below that level. Buyers need to auction ES back above 1094 before any of us consider new longs here.
