Pre-open Tuesday 14th September
Monday was the third gap up day since the August low. Gap up days following a low are often an indication of short covering rather than strong buying. A probe lower to test the 1107 1/2R support would fill that gap. My #1 Rule tells me I have to wait for a Buying imbalance anyway. Until 1107 gets broken I will expect higher as I explained yesterday (highlighted).
ST Sentiment: My version of the Rydex Assets Ratio stands at 1.16 – still low. But VIX reached its lowest level since early May which is a slight concern.
Supporting Charts
– USDJPY: New multi-year low today.
+ EURUSD: Price Osc up for nine consecutive days as this chart rallies off the 1.26 support (1/2R off June low).
+ UDX: Momentum is down (PriceOsc lower for nine consecutive days). If support at 81.80 (1/2R off Aug low) is broken next support is the major level at 80.15
+ TLT: printing below the major 1/2R level at 105.22 and PriceOsc lower for eight consecutive days.
imo these charts have a positive bias for equities.
