pre-open comment Wednesday 17th October
Following Monday’s rejection of the VAL (dashed) and subsequent Aggressive Buying, ES gapped higher in Tuesday’s session to generate a Value Area entirely above the 1435 poc and almost entirely above the 1442.50 1/2R. The price action in the Large Cap ETFs, SPY & DIA is encouraging. Both are printing back above their 1/2R off the September highs. SmallCaps IWM and Tech XLK are still lagging in the sense that they have not yet recovered back above their equivalent levels – that would be a big positive for the market if/when it happens.
On 9th Oct I wrote
>>If more time is printed around (ES) 1452/1454 the poc could migrate higher which would most likely be bullish.<<
Pre-open ES is printing above 1450 and the above comment is still valid. The VAH of the recent range is 1452 (dashed) so a stall here is possible.
First Level Support = 1442.25 (1/2R off Sep high)
Second Level Support = 1435.00 (5mn poc)
Key chart levels this week: I continue to monitor the Maj 1/2R (off 2000 high) on following charts. Price location relative to these levels is currently weak.
QQQ = 70.13 (Tue Close 68.12). Nasdaq Comp = 3120.50 (Tue Close 3101.17). Nasdaq 100 = 2805.60 (Tue Close 2778.40).
Sentiment: My version of the Rydex Assets Ratio was lower at 4.01 (from 4.15). The ratio falling on a day when the market was up 1% indicates the Rydex traders don’t trust this move higher, and that is usually ST bullish (contrarian). The recent high for the ratio was 5.51 on 09/18.
Supporting Charts (+ or – or ? for equities).
(Momentum = daily PriceOsc)
+ EURUSD: Is today printing above the 2yr poc at 1.3117 and could possibly challenge the September at 1.3172 (which itself was the highest level reached since early May).
+ Dollar Index: Has today broken below the 79.19 poc which is weak price location.
+ TLT: I have been saying that “price relative to the 1/2R off the September low at 121.64 is worth monitoring” – pre-open high today is 121.63.
imo these charts imply a positive bias for equities.
