pre-open comment Thursday 26th July
Following comments from the ECB, the market has spiked higher pre-open. ES will very likely print above 1346 (Tuesday’s session high) in today’s session and that would negate the negative implications of Tuesday’s Aggressive Selling imbalance (red-at-bottom). It is rare that a red-at-bottom low is not tested within two days, and rare that a red-at-bottom low is left at the bottom of a correction but if Significant Buying is marked above 1334.50 it would suggest higher in the ST.
Interestingly the 5mn poc at 1348 sits at the 1/2R off the July high. This often happens across a corrective range. 1348 is therefore a doubly important level and time printed above that level would be an ST sign of strength.
First Level Resistance = 1366 (poc)
First Level S/R = 1348 (5mn poc)
First Level Support = 1334.50 (1/2R off March high) SPY=134.67 (1/2R)
Sentiment: My version of the Rydex Assets Ratio was slightly lower at 3.99 (from 4.27). Rydex traders appeared to be “buying the dip” this week. From a contrarian pov that is not usually bullish. Let’s see what they do with today’s price action.
Supporting Charts (+ or – or ? for equities).
(Momentum = daily PriceOsc)
? EURUSD: new two year low on Tuesday but strongly higher today.
? Dollar Index: new two year high on Tuesday but sharply lower today.
– TLT: new high on Wednesday.
in the ST we should let see what today’s session brings before trying to imply a bias for equities from these charts.
