Pre-open comment Wednesday 4th May
Tuesday saw further weakness following Monday’s Aggressive Selling. Session close was below previous two lows and that pattern usually indicates a further low test (Tuesday’s low).
With the LT analysis looking positive I will assume this early-in-the-week weakness is normal corrective activity unless ES fails to hold above 1327 but I do need to see Significant Buying marked (green) before considering new long Trades.
First Level Resistance = 1354.5 (15day poc)
Support = 1327 (6month poc)
ST Sentiment: My version of the Rydex Assets Ratio was up again on Tuesday to 4.57 (from 4.51) which is the highest ratio I have in my database. This rampant enthusiasm is a worry but it is not reflected in the option ratios. I would this ratio to come down quite a bit before the market could move higher.
Supporting Charts (+ or – or ? for equities).
+ EURUSD: On Monday this chart printed its highest level since December 2009.
+ UDX: On Monday this chart printed its lowest level since July 2008.
– TLT: On Tuesday this chart printed a new 30day high.
imo these charts are mixed but have a postive bias for equities.
