Pre-open Wednesday 9th September
The market has rallied from the deeply bearish Sentiment levels seen at the end of last week which means the Resistance levels on the Stock Index charts, see below, will likely come into play. Breadth, see below, still needs to improve to be supportive but price printing time above these levels would be stronger location.
Major Resistance = 1978.50 (1/2R off this year’s high)
minor Resistance = 1973.00 dashed (minor VAH)
Major Support = 1870.00 (formerly the maj poc)
minor Support = 1932.00 (min poc)
ETFs: Important Resistance levels to watch this week (see eBook) = SPY 198.10; IWM 116.00; DIA 166.95. Price above these levels would be much stronger location.
Stocks>50dyma numbers: Nyse 20% (from 13%), Nasdaq 28% (from 21%), R2000 25% (from 19%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was almost unchanged at 4.26. Friday’s ratio at 4.22 the lowest level since October 2013. This is a contrarian indicator.
Supporting Charts:
Bonds TLT: found Resistance 08/24 at 126.69 (1/2R off this year’s high) and sold off. Momentum (PriceOsc) is negative and down.
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) and today the chart is probing that level again. Price above here is strong location.
Gold GLD: chart rallied into mid August but has retraced from there. Price below 107.78, the 1/2R off July low, would be weaker price location. Momentum, although still positive is weakening.
Oil USO: printed a new low on 08/24 and then rallied very strongly from there to its highest level since late July. Momentum has been up and has just turned positive.
EURUSD: recently moved to a weaker LT price location below 1.1340 (12mn poc) which is now Resistance. The minor 1/2R off March low at 1.1083 provided Support last week but price below that level would suggest further weakness.
