posted 08.26 a.m. est
Pre-open comment Wednesday 7th May
The 4mn poc is now at 1872. This is First Level Resistance. Strictly applying my rules I had to mark Aggressive Selling (red-at-bottom) on Tuesday. Although the Value Area was overlapping/lower on Tuesday it is highly unusual to mark Aggressive Selling on a day where the previous day’s low is not broken. So, although new long trades are now eliminated for me based on the red-at-bottom low I am not convinced about the Effectiveness of the Selling. Red-at-bottom lows are tested within a day (or two) about 80% of the time; Bulls would hope that if yesterday’s low is tested Buyers will react just above 1860 as they did on Monday. Breadth deteriorated yesterday, see below.
First Level Resistance = 1872.00 (4mn poc)
First Level Support = 1849.50 (minor 1/2R)
Major Support = ES 1835.50 (maj poc)
Pre-open, SPY prints below 187.73 (7mn poc), IWM prints below111.48 (12mn poc), QQQ prints above 86.32 (8mn poc) and DIA prints above 163.40 (2yr poc).
Stocks>50dyma numbers: Nyse 46% (from 53%), Nasdaq 23% (from 27%), R2000 24% (from 30%). Numbers >50 are considered supportive.
Sentiment: My version of the Rydex Assets Ratio was lower at 6.05. On 04/17 the ratio fell as low as 4.83, a 72day low.
Supporting Charts (+ or – shown as implied bias for equities)
– KEY Chart Financial Sector XLF: pre-open today prints below its maj 1/2R level (22.04).
+KEY Chart EURJPY: chart is printing above 140.96, the 1/2R off Dec high.
– KEY Chart Bonds TLT: recently tested and held, the 2year poc Support at 107.24 and last week printed its highest level since June last year.
Dollar Index: below 79.76, the maj poc and is today printing close to last year’s low which is 78.92.
Gold GLD: still printing below 127.20, its 18mn poc.
Oil USO: printing below 37.31, the 1/2R off 2011 high but has stalled at the 36.11 Support (1/2R off 2013 high).
EURUSD: Printing above 1.3673, the 12mn poc Support and today prints close to the March high.
