Pre-open comment Wednesday 4th January
Tuesday’s session represented a probe above the 4month VAH at 1265. Pre-open ES prints almost back down at that level. This may be a failed test. I would look for Significant Selling to be marked before anticipating further weakness in the ST. And I would want to see Significant selling below the 1256 poc before anticipating further weakness in the IT. Key chart is Dollar Index, see below.
Support = ES 1256 (poc) SPY = 126.00
Sentiment: My version of the Rydex Assets Ratio was lower at 2.62 (from 2.78). Recent high is 2.96 (11/07).
Supporting Charts (+ or – or ? for equities). (Momentum = daily PriceOsc)
– EURUSD: Chart is still in a very weak price location. Today’s price action indicates chart may want to retest last week’s low which was itself a test of the Jan 2011 low.
? Dollar Index: high today (80.17) has been a probe up into the 1/2R off the 2008 low (80.15).
– TLT: the decline off the Dec high held the 117.88 Support (10month poc). Strong location.
imo these charts would have a clearer positive ST bias for equities if the Dollar Index chart could print time back above 80.15.
