posted 9.29 a.m. est
Pre-open Wednesday 27th October
Pre-open yesterday I wrote “Pre-open ES is probing down below the First Level support at 1178. ST Bulls would want to see ES quickly back above that level.”
The open was lower than 1178 but Buyers Responded and quickly auctioned ES back above that level. In the p.m. there was intra-day support from that level (see chart). In the minor degree that’s what you would want to see from a ST Bullish pov. But, overnight almost all price action has been below 1178 and pre-open there has been a price probe to just below the green-at-bottom low yesterday. That doesn’t normally happen when there’s a Responsive Buying Imbalance and may be an early indication that there’s change coming. The Rydex traders got bullish yesterday and I believe the supporting charts are no longer so helpful for equities see both below.
Dayframe: If Buyers are still in control of the dayframe I would expect similar price action post-open as we saw yesterday. i.e. Responsive Buyers quickly bring it back above 1178. The more time spent below 1178 after the open the more indication there is that we’ll see further weakness.
ST Sentiment: My version of the Rydex Assets Ratio was up from 1.65 to 2.17 which is the highest ratio since May. Bear Fund assets that I follow were down by 14%.
Supporting Charts
? USDJPY: New low for this chart on Monday but Price Osc has been up for eight consecutive days.
– EURUSD: Major 1/2R at 1.3965 (off the 2008 high) in play. Chart printing below that level today. Price Osc down for fourteen consecutive days.
? UDX: there’s been little bounce from the ten month low set on the 15th but Price Osc up for nine consecutive days.
+ TLT: chart still in weak location with confirmed lower high and lower low.
these charts are mixed but imo have a slightly negative ST bias for equities.
