posted 8 a.m. est
Pre-open Tuesday 26th January
Monday’s day session was a narrow range/value area. This is a typical profile when a market prints close to a major poc – in this case the 10month poc at ES 1094. Sellers have quickly auctioned price back to value (1094). In the longer timeframe this is “Responsive” activity although in the dayframe it can be classified as “Aggressive” (note the red-at-bottom profiles recently).
This area of price (major poc) would be an obvious level for ES to find support and we will monitor the imbalances day to day to gauge whether their is any Significant Buying taking place which would indicate higher.
The most bearish action now would be further Effective Selling activity below 1094. That would indicate a change of trend in the longframe because it would signify Selling strong enough to auction price away (lower) from value. Clue in the short term is whether 1094 acts as support or resistance.
ST sentiment indicators: My version of the Rydex Assets ratio fell from 2.875 to 2.26 which is still high. From a contrarian pov this is not yet bullish.
However the ISEE (equity only) Index came in at 121 which is the lowest single number since mid-June last year and the VIX has spiked above its upper bollinger band (40day), an event which accompanied the lows of September, October and November.
