posted 9.28 a.m. est
Pre-open Thursday 29th July
I marked Aggressive Selling on Wednesday (red-at-bottom). As I never fade the last imbalance this means I cannot now initiate new longs. Stats suggest there’s a strong chance that Wednesday’s low will be tested today and if ES finds it hard to print above 1108 early in the session then the odds for that will increase. Although I could be very wrong, (obviously) this looks like Buyers Resting to me, forcing a response from the Sellers. And, I never like to short if ES is printing just above a major poc (in this case 1094). So I’m watching for now.
First Level S/R is 1108. This level could remain sticky as I suggested yesterday.
ST Sentiment: My version of the Rydex Assets Ratio rose again on Wednesday to 1.50 (up from 1.43). This is up quite a bit from the readings below 1 earlier this month but is nowhere near indicating an over-enthusiastic extreme like it did in late April.
The ISEE (equity-only) Index shot up to close at 240 yesterday. Although that’s only one day’s reading it is a very high number. There was a high number on 7th July just before a three-day correction – if we quickly see one or two more of these it will be a warning.
Supporting Charts (technicals based on daily Price Oscillator)
? USDJPY: This chart continues to struggle but Price Osc was again higher.
+ EURUSD: New 11wk high today. My target 1.3240
+ UDX: The 81.87 support was broken today. This puts UDX in a weak price location. Next obvious support is 80.15 the 1/2R off the March08 low.
? IEF: the chart has a pattern of higher highs and higher lows and this is still intact although TLT could break that pattern imminently.
imo these Charts are mixed but it looks like further ST weakness for dollar and that should help equities.
