pre-open comment Wednesday 7th August
Note: this was posted at 06.00 a.m. est
Tuesday’s session generated a lower/wider Value Area but in the ST as long as ES prints Value Areas above the minor (18day) poc at 1682.50, price location is strong. Time printed below that level would be the first indication of ST weakness. Time below 1677.00 (40dy poc) would be the first indication of weakness in the longer timeframe.
1st Level LT Support = ES 1677.00 (40dy poc)
Stocks>50dyma numbers: Nyse 70%, Nasdaq 72%, R2000 71%. Numbers >50 are considered supportive. Numbers >80 are considered overbought.
Sentiment: My version of the Rydex Assets Ratio was higher at 3.87 (from 3.68) which is a 33day high but to put that in persective; the ratio reached as high as 5.43 at the market May high and as low as 2.15 on 07/10 (which was the lowest ratio since January 2012). With the market higher than the May high the ratio has been slow to climb. Worth noting that VIX printed 11.83 on Tuesday, its lowest level since mid March indicating complacency.
Supporting Charts
Bonds TLT: Last week chart printed its lowest level since Aug 2011. The 4mn poc migrated to 107.22 and TLT closed at 106.01 on Tuesday which is weak price location.
Oil USO: Bulls would want to see time printed above the maj poc at 37.93 and Momentum turning up. USO closed at 37.46 on Tuesday.
Gold GLD: The June low was the lowest print since Aug 2010. Rallied from there but I would want to see chart printing above the 12mn poc at 134.17 before assuming further strength. Momentum is positive but down. Chart printed a 14day low on Tuesday.
Dollar Index: Sampled on a 30minute basis the major poc migrated higher to 82.73 last week. Currently in ST weak price location below that level. Bulls would want to see price printing time above that poc. Momentum is negative but up.
EURUSD: Has rallied strongly since testing the maj poc Support at 1.2777 on 07/09. As long as 1.3065 holds (9mn poc) the chart is in a strong price location. Momentum is positive but down.
