posted 9.25 a.m. est
Pre-open Thursday 26th August
Longframe: Long positions still eliminated for me.
Dayframe: The last imbalance is now Buying (green) and that eliminates new short trades for me. However until ES manages to print some value above 1065.25 (1/2R off July low) I remain cautious about being long.
Wednesday saw Responsive Buyers (green-at-bottom) marked and more Aggressive Buying (green-at-top) later in the session. The Value Area was lower and wider so this is not yet Effective Buying. That’s what Bulls would want to see and hopefully above 1065.25.
ST Sentiment: My version of the Rydex Assets Ratio was down from 1.31 to 0.90. Bull fund assets that I follow were down 16% and Bear fund assets were up 16%. This reinforces the idea that downside is limited. Bulls would want to see the ratio stay low if the market rallies. I would have preferred to have seen a spike in the VIX to confirm a low here – VIX hasn’t been above high twenties since early July. That’s another reason for Bulls to wait for more confirmation from price action.
Supporting Charts
– USDJPY: New multi-year low on Tuesday.
? EURUSD: Has stalled at 1.26 (1/2R off June low). Bulls would want to see this support hold. Breaking below this level would indicate further weakness.
– UDX: PriceOsc higher for 13 consecutive days.
– TLT: broke out above the 1/2R level at 105.22 last week. Very overbought though.
imo these charts are not yet positive for equities.
