posted 9.29 a.m. est
Pre-open comment Thursday 7th April
Sellers were marked on Wednesday, Responding to a test of the recent highs. The Value Area was overlapping so this is not Effective Selling. If I strictly apply my rules then Long trades are eliminated for me today because of that red-at-top high but if ES prints back to that high I will be anticipating brekout higher.
Dayframe: The last five days have been consolidating within a tight range and we are likely looking at a breakout-go-with situation. Monday to Wednesday high-low range is 13.5 points and average weekly range is currently 30 so we’re very likley going to see this week’s range extended over the next two days. If ES holds above 1328.50 early in the session then that’s likely to be higher. The minor poc (3-4 weeks) migrated slightly higher to 1328.50 and this is the most important level to monitor ST.
First Level S/R = 1328.50 (minor poc)
Support = 1318 (2mth poc)
LT Sentiment: Investors Intelligence (newsletters) poll is interesting. Bears appear to have capitulated falling from 23.1% previous week to 15.7% – an extremely low number. Bulls rose to 57.3% which leaves the nett at 41.6. This is the highest nett since October 2007.
ST Sentiment: My version of the Rydex Assets Ratio was down to 3.62. Tuesday’s ratio (3.87) was exremely high. Only one reading higher than that which was 3.94 on 19th January.
Supporting Charts (+ or – or ? for equities).
+ EURUSD: Tested the November high to the highest level since January 2010 – monitoring possible rejection here as chart is printing back below 1.4282 (Nov high).
+ UDX: Recent test of November’s low has not yet seen the chart any lower but the Dollar Index is still in a weak price location.
+ TLT: Chart has broken below the 1/2R off the February low at 91.54 which puts it in a weak position.
imo these charts have a positive ST bias for equities.
