Pre-open comment Tuesday 4th October
1st Level Resistance on Monday (1132) was once again tested very briefly and then rejected, as it was on Friday. And, like Friday, following the price rejection ES declined quickly. Also notice the weak pattern each day where the Value Area is generated entirely below the previous day’s poc – we have noted this before in a trend.
Pre-open today all index ETF charts are printing below their major Support Levels (shown in the eBook). If there is not a quick recovery back above these levels then the charts are in a very weak price location and the potential for another fast move down is high.
Critical Levels are ES 1094 and SPY 109.17. These prices should be Major Resistance.
ST Sentiment: My version of the Rydex Assets Ratio was lower at 1.11. In the last twelve months there has only been one lower ratio than this and that was the recent extreme low for this indicator at 1.10 on 22nd Aug.
Supporting Charts (+ or – or ? for equities).
– EURUSD: Broke Major Support in early September and is now printing below 1.3416 (1/2R Support off June 2010 low).
– Dollar Index: today has printed highest level since January.
– TLT: New high today
imo these charts have a negative bias for equities.
