See yesterday’s highlighted comments. On Tuesday I marked Aggressive Selling but this was on a gap-down day which makes any negative implications less reliable. If ES prints above 1939.50, yesterday’s high, it will negate that selling imbalance. Breadth and price momentum are not yet encouraging but yesterday’s sharp sell-off precipitated some fear, see Sentiment below. There will be a short video posted today to discuss Key chart levels.
Resistance ES = 1978.50 dashed (1/2R off this year’s high)
possible S/R today = 1912.00 (1/2R off recent low)
Major Support = 1870.00 (formerly the maj poc)
Stocks>50dyma numbers: Nyse 11% (from 17%), Nasdaq 20% (from 23%), R2000 16% (from 23%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was sharply lower at 4.23, the lowest level since October 2013. Bear fund assets that I follow reached their highest level since December 2013 and Bull fund assets fell to their lowest since February 2014. These are contrarian indicators.
Supporting Charts:
Bonds TLT: found Resistance last week at 126.69 (1/2R off this year’s high) and has sold off.
Dollar Index: printing above 94.67, the 12mn poc. Price below this level is weak price location. There is Resistance at 96.50 (1/2R off this year’s high).
Gold GLD: chart reached a 32day high early last week but retraced from there. Price below 107.78, the 1/2R off July low, would be weaker price location.
Oil USO: very volatile – printed a new low on 08/24. Rallied very strongly from there to close on Monday at its highest level since late July and then sold off sharply on Tuesday.
EURUSD: closed below 1.1340 (12mn poc) which is now Resistance.
