Pre-open Tuesday 18th May
I marked Significant Buying on Monday. This was not Effective Buying because the Value Area was overlapping. Overnight ES has recovered and currently (4a.m. est) prints back above 1136, the 1/2R off the April high. If ES can hold above this level it implies some ST strength and possibly a rally to relieve the ST oversold condition discussed in yesterday’s webcast. I will wait for Effective Buying to be marked before even considering ST longs and that would need to be above 1136. If ES does not hold above that level after the open then it is back in a weak position.
Total Advancing Stocks: 2,726 Total Declining Stocks: 3,609. The market closed pretty much flat with the open and slightly up on Monday following the p.m. rally but declining stocks outweighed advancing. That’s not supportive.
1/2R at 1136 (dotted) is First Level S/R. Intraday support/resistance from this level would probably be a clue re ST strength/weakness (as per yesterday).
Major Resistance at 1161.50
Major Support at 1094
ST sentiment: My version of the Rydex Assets Ratio was up slightly from 1.8 to 1.9.
Supporting Charts (technicals based on daily Price Oscillator)
as of 4a.m. today
– USDJPY: down from the 93.60 1/2R resistance. Daily Momentum is down.
– EURUSD: a new 4 year low on Monday; Daily Momentum down for 18 days
– UDX: a new 12 month high on Monday, currently printing above the daily chart resistance at 85.14; Price Osc up for 18 days.
– TLT & IEF: remain above major levels;
these charts are not supportive of equities
