posted 9.23 a.m. est
Pre-open Tuesday 6th July
Longframe: Long positions are eliminated for me because the ChartProfit Market Timing system (weekly) stayed negative (red) for the ninth consecutive week.
Dayframe: Sellers are still in control. First ST sign of strength would come if Effective Buying is marked above the minor poc at 1023.
SP500 index hit a new 9month low last week as it broke below 1040. This was interpreted by many as a significant bearish development as 1040 represents the neckline of a potential head-and-shoulders top. This may have been the event which triggered capitulation among the Rydex mutual fund timers (see below).
LT Sentiment: There’s enough Bears in this data now to expect a bounce at least (contrarian). See this week’s eBook for details.
ST Sentiment: On Friday my version of the Rydex Assets Ratio recorded the lowest level since July 2009. This would suggest a degree of pessimism usually seen at (or close to) a price low of some degree (contrarian).
Supporting Charts (technicals based on daily Price Oscillator)
– USDJPY: new low for the year last week.
+ EURUSD: higher low based on the 1.2133 major halfway level was confirmed by a breakout above the June high.
+ UDX: Has broken below the 85.14 poc support.
? IEF and TLT. Price Osc is diverging negatively with price and turned down on Friday.
imo: these charts are mixed but improving for equities.
