posted 2.29 a.m. edt
Pre-open comment Wednesday 24th August
Significant Buyers were marked twice on Tuesday. Responsive Buyers (green-at-bottom) saw opportunity when ES probed below the minor VAL at 1125 early in the session and Aggressive Buyers (green-at-top) were marked later in the day. 80% of the time green-at-top highs are tested the following day.
Longframe: LT analysis remains negative.
Dayframe: Although the LT analysis remains negative, Short Trades are now eliminated for me at least until Significant Sellers are marked again. I believe that the LT trend of the market is firmly down but we could see a rally here to relieve the oversold condition of the market and hurt some of the late Bears (Bear Fund assets that I follow were up 17% on Monday reaching their highest since Sept ’10). If ES is ST strong then First Level Support at 1134 would most likely not be tested again this week.
First Level Support = 1134 (25dy poc) (SPY = 114.25)
Major Support = 1094 (this is the MAJ LT poc) (SPY = 109.38)
ST Sentiment: My version of the Rydex Assets Ratio was up slightly to 1.23, from Monday’s 1.10 which was the lowest reading since Sep 2010 (an extreme reading and would usually suggest that downside is limited).
Supporting Charts (+ or – or ? for equities).
+ EURUSD: prints above the band of maj LT support between 1.3920 to 1.3965 and currently, as I write, just above the 1/2R off May high at 1.44.
+ Dollar Index: Currently printing below the 74.96 poc.
– TLT: Currently printing above the major 1/2R off the 2008 high at 105.22.
imo it is difficult to imply a bias for equities in the ST.
