pre-open comment Tuesday 22nd May
Significant Buying marked for the first time in more than three weeks.
In the pre-open 9th May with ES printing 1350s I said that “one of the real concerns is the lack of major Support for ES around current levels”. Since then ES fell more than 4% to a strong level of poc Support (1307) and on Monday I marked Responsive (green-at-bottom) Buying below that level and Aggressive (green-at-top) Buying above that level which is a ST encouragement for the Bulls. Short trades are now eliminated for me until Significant Selling is marked again.
I’m not convinced that we’ve seen the sort of capitulation in the sentiment numbers that would normally occur at a bottom following a sell-off like this but this is an area of major Support for this chart and we should look for further signs of strength such as ES holding above/printing time above 1307 and the %Stocks>50dyma numbers picking up. Obviously ES printing time back below 1307 would put it back in a very weak price location.
Potential Support / Resistance = 1307 (maj poc)
Sentiment: My version of the Rydex Assets Ratio was down again on Monday to 3.3 (from 3.61). This is lower than the 3.45 reading on 04/27. Ratio reached a low of 3.07 on 03/13.
Supporting Charts (+ or – or ? for equities).
(Momentum = daily PriceOsc)
– EURUSD: Major poc is at 1.2777. Chart currently prints just below that level. Last week printed its lowest level since January.
– Dollar Index: last week printed its highest level since January. Chart well above the important level at 80.15.
– TLT: on Friday chart printed its highest level since October. Chart very overbought technically.
imo these charts have a negative bias for equities.
