posted 09.17 a.m. est
See Tuesday’s comments. As expected Monday’s low at 1865 was re- tested on Tuesday and pre-open today ES has printed as low as 1848.50. This is below the major Support at 1872 (now Resistance) and puts ES (and SPY) in a very weak price location. The Rydex ratio suddenly took a dive, see below, but despite that and extreme oversold technicals there are too many negatives to consider the long side. Minimum I would want to see is Effective Buying marked above 1872 and other Key Charts in improved price locations.
Other Key Charts: DIA prints below 164.23. its major Support. XLK prints below 38.42, its major Support.
ES Second Level Resistance = 1949.00
ES First Level Resistance = 1872.00 (maj poc)
Stocks>50dyma numbers: Nyse 17% (from 12%), Nasdaq 20% (from 17%), R2000 26% (from 19%) Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was sharply lower at 5.58 (from 7.18). This is the first real sign of fear from the Rydex traders in this sell-off. Bull fund assets I follow were down 9% to the lowest level since February. Bear fund assets up nearly 15%. Also, this week VIX has spiked to its highest level since June 2012.
Supporting Charts:
Bonds TLT: printing above 117.15 (maj poc) in a strong price location and has today printed its highest level since May 2013.
Dollar Index: recently printed a four year high. Has corrected a little from there.
Gold GLD: Last week the chart tested the Jan 2014 and June 2013 lows and is currently up off this proven chart Support. Price below these lows would likely spark another round of selling.
Oil USO: The potential Support at 34.17 (1/2R off 2009 low) was broken last week and is sharply lower from there, today printing its its lowest level since June 2012.
EURUSD: earlier in the month printed a two year low. There is Support lower at 1.2300
