posted 9.29 a.m. est
Pre-open Thursday 29th October
Early in Wednesday’s session ES failed to even probe back into Tuesday’s Value Area and spent the rest of the session heading lower. Aggressive Selling was marked and the Value Area was lower and wider on increased volume. This is Effective Selling below the 1063/64 poc which, as I wrote on Tuesday, puts Sellers in control. This means I do not consider the long side until Effective Buyers re-emerge
As I have mentioned before, 80% of the time a red-at-bottom day sees the low tested during the following session. Therefor Wednesday’s low is likely to be tested. The first minor resistance is Wednesday’s controlling price at 1050 (dashed red line) which as I write is the pre-open high.
Interestingly the Rydex assets data indicate that the mutual fund timers did not panic in any way yesterday even though the market was down quite strongly – and the ISEE (equity only) Index was 180 on Tuesday and 191 on Wednesday. These are wrong-way-traders and from a contrarian viewpoint this is a negative for the market.
