YM 30-min
ES 30-min
ER2 30-min
RUT
Rut Daily
What I'm reading from RUT daily:
- A hammer - suggest bullishness in the short-term
- Bullish divergence for period Aug 26 - Sep 5
- Resistance at 743 and764
This is a freak.
I don't know what to make out of it.
So, I'm going to use this instead:
And this:
What I'm reading from the increase in open interest from Aug 20 - 29 is that there was both selling and buying. Volume is not fantastic - a seasonal factor and hence nothing much to read into.
Open interest dropped from Sep 2 onwards as price plunged on increased volume, and this tells me that contracts are being liquidated and weaker buyers are being squeezed out.
When the weaker sellers are being squeezed out as well (today will be a day of fierce short-covering), we should start seeing some sort of a rally.
Whether the rally will last will depend on a myriad of factors, among which will be the performance of the finance sector (lots of buying of banking stocks from Friday on and if price doesn't continue to move up, it will be really bad for the bulls), the price of oil (OPEC's decision regarding supply restriction will play a huge role), USD (if oil goes up, this would likely come down. After the bailout of the two banks, USD should come down a little...), a string of key econ data to be released this week.
For now, ER2 has found resistance at 746. If it breaks up, the next resistance is at 751. If ER2 breaks the 764 resistance, and stays above that, I will be convinced that Russel 2000 has completed its retracement and is on its way back up (regardless of where DOW and S & P are heading).
Let's not forget our Hammer on the RUT's daily chart. ER2 should be going up for the next few days, regardless of any moderately bad news.
That's just my view of course.
As far as today's concern, ER2 will have to break out of 751 resistance to convince me to go long. It should break out of 746 easily today. If it doesn't, it simply tells me that ER2 is still LOST.
Open interest dropped from Sep 2 onwards as price plunged on increased volume, and this tells me that contracts are being liquidated and weaker buyers are being squeezed out.
When the weaker sellers are being squeezed out as well (today will be a day of fierce short-covering), we should start seeing some sort of a rally.
Whether the rally will last will depend on a myriad of factors, among which will be the performance of the finance sector (lots of buying of banking stocks from Friday on and if price doesn't continue to move up, it will be really bad for the bulls), the price of oil (OPEC's decision regarding supply restriction will play a huge role), USD (if oil goes up, this would likely come down. After the bailout of the two banks, USD should come down a little...), a string of key econ data to be released this week.
For now, ER2 has found resistance at 746. If it breaks up, the next resistance is at 751. If ER2 breaks the 764 resistance, and stays above that, I will be convinced that Russel 2000 has completed its retracement and is on its way back up (regardless of where DOW and S & P are heading).
Let's not forget our Hammer on the RUT's daily chart. ER2 should be going up for the next few days, regardless of any moderately bad news.
That's just my view of course.
As far as today's concern, ER2 will have to break out of 751 resistance to convince me to go long. It should break out of 746 easily today. If it doesn't, it simply tells me that ER2 is still LOST.
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