Technical analysis – Market pre-open 14th October 2015
On Tuesday I marked Significant Selling for the first time in eleven days. This was an “outside” day with a Value Area overlapping the VA of the previous day so this was not convicingly Effective selling but my rules say that new longs are now eliminated for me at least until Significant Buying (green) is marked again. Even so, this was the fifth Value Area generated above 1971.00, the 1/2R off this year’s high and ES must hold this Support to remain in a ST strong price location. The analysis looks mixed with large cap ETFs (SPY, DIA)in strong price locations and small caps (IWM) unable to overcome Resistance, see below.
First Level Support = ES 1971.00 (1/2R off this year’s high)
Second Level Support = ES 1923.00 (50dy poc)
Key Support this week: SPY 198.10 = 1/2R off May high; QQQ 105.10 = maj poc; DIA 166.95 = 1/2R off May high.
and Key Resistance: IWM 116.00 = maj poc; FTSE100 6445.50 = 1/2R off April high.
Stocks>50dyma numbers: Nyse 60% (from 65%), Nasdaq 49% (from 53%), R2000 55% (from 60%)(. Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was higher at 4.03 but early last week the ratio recorded 3.09 which was a two year low.
Supporting Charts:
Bonds TLT: has to hold above the 121.40 Support (12mn poc) to remain in a strong price location and has done that so far this week. Futures indicate a higher open today.
Dollar Index: in September rallied back to the Resistance at 96.50 (1/2R off this year’s high) without overcoming it. Fell last week and today is printing below 94.67, the 12mn poc.
Gold GLD: looks set to test the August high with Momentum positive and futures indicating a higher open.
Oil USO: recently found Support at the 1/2R off August low rallied from there to test the August high on Monday. This was rejected and USO fell sharply from there. The 1/2R Support off the August low is now at 14.28. Futures indicate a lower open.
EURUSD: is today printing above 1.1340 (12mn poc). This is stronger price location.
