posted 08.53 a.m. est
Pre-open comment Wednesday 15th January
Pre-open last Thursday I wrote “In the last six days we have had an Aggressive Buying imbalance and a Responsive Selling imbalance, both of which did not see follow-on Buying/Selling. This usually indicates a poc of some importance (i.e. currently most important) is emerging somewhere in the current range of activity.”
Once again there seems to be no follow-on Selling after Monday’s red-at-bottom low. You can see from the chart (and the inserted daily chart) that ES is currently finding value just above 1830. Immediately after the Open yesterday, Buyers Responded and ES was auctioned back to this area of price and pre-open today it has once again probed the Resistance at the 1835.50 poc. If price can print time above this level (and despite current Sentiment readings) it would suggest development up to 1865. Only Significant Selling marked below 1803.50 (4mn poc) would be a concern in the LT.
First Level S/R = 1835.50 (30dy poc)
Second Level Support = 1803.50 (4mn poc)
Stocks>50dyma numbers: Nyse 62% (from 56%), Nasdaq 70% (from 65%), R2000 65% (from 57%). Numbers >50 are considered supportive.
Sentiment: My version of the Rydex Assets Ratio was almost unchanged at 4.87. The ratio reached 6.65 on 12/27 which is the highest ratio in my database and registered extreme optimism which has historically been a warning for the market.
Supporting Charts UNCHANGED
Bonds TLT: is now printing above 102.85, the 10mn poc, in a at 102.85 in a stronger price location. Momentum is positive and up.
Gold GLD: Tested the June low late December and has rallied from there but remains in a weak price location.
Oil USO: Last week printed its lowest price since May. In a weak price location below 34.13 (3yr poc). Momentum is negative and down.
Dollar Index: For three months has been oscillating around 80.15, the maj poc. Looking for a clear higher low above, or lower high below this level.
EURUSD: Recently broke out to a two year high but this was rejected and chart printed a 23day low last Thursday. Still in a LT strong price location above 1.3524, the 9mn poc.
