Pre-open Wednesday 20th October
On Tuesday ES found support at exactly 1155.50, the 15daypoc mentioned yesterday. If ES prints value below 1155.50 this could become something more serious but so far I’d classify yesterday’s price action as normal corrective activity. I’ll assume this is Buyers Resting until Significant Sellers are marked.
The ST Sentiment (below) suggests public optimism is on the up. If ES manages to retest Monday’s high enthusiasm is likely to increase fast which would be a problem. Alternatively if there is follow through weakness imminently and Effective Selling is marked below 1155.50 (now proven support) then I would expect further weakness.
Dayframe: 6day VAL is now 1165.50. Pre-open ES just probed down to that level. ST Bulls would want to see this price quickly rejected followed by ES consolidating back above 1172.50.
First Level Resistance: 1172.50 (minor poc)
First Level Support: 1155.5 (15daypoc)
ST Sentiment: My version of the Rydex Assets Ratio was up from 1.79 to 2.03. This is the first time the ratio has been above 2 since early May. It is now slightly higher than it was at the June and August price peaks.
Supporting Charts
– USDJPY: new low for this chart last week.
– EURUSD: Major 1/2R at 1.3965 (off the 2008 high) in play. Chart printing below that level. Positive for equities only if it can recover back above this level.
? UDX: New ten month low last week.
+ TLT: new two month low for this chart last week.
imo these charts are mixed and do not have a bias for equities.
