posted 9.24 a.m. edt
Pre-open comment Tuesday 23rd August
Monday’s session generated an overlapping/lower Value Area with Responsive Sellers (red-at-top) marked.
Dayframe: Price is currently being accepted at lower levels since last Thursday’s sell-off. In the ST the poc of this minor range is 1134 (now the 25dy poc) with the minor VAH at 1144 (dotted). Pre-open a probe above 1144 has been rejected which indicates that the corresponding VAL at 1125 (dotted) is likely to be tested. If 1125 is accepted (time) then the minor poc could fall to this level which would be ST negative. I need more evidence of strength to consider the long side on any timeframe.
First Level S/R = 1134 (25dy poc) (SPY = 114.25)
Major Support = 1094 (this is the MAJ LT poc) (SPY = 109.38)
ST Sentiment: My version of the Rydex Assets Ratio was down at 1.10, the lowest reading since Sep 2010. This is an extreme reading and would usually suggest that downside is limited, however, we would need to be very careful about making that assumption if 1094 is broken. Bear Fund assets that I follow were up 17% yesterday reaching their highest since Sept ’10.
Supporting Charts (+ or – or ? for equities).
+ EURUSD: prints above the band of maj LT support between 1.3920 to 1.3965 and currently, as I write, just above the 1/2R off May high at 1.44.
+ Dollar Index: Currently printing below the 74.96 poc.
– TLT: Currently printing above the major 1/2R off the 2008 high at 105.22.
imo it is difficult to imply a bias for equities in the ST.
