Technical analysis – Market pre-open 22nd October 2015
Following two days of Ineffective Selling in the middle of last week Buyers (green) auctioned ES higher and price has been ranging since then between 2010 and 2030 generating overlapping Value Areas. Volume has fallen off and VAs have narrowed but Sellers have not made a mark across this period. If Significant Selling is not marked soon Buyers will likely re-enter. One hour pre-open today ES is printing below 2020.50, the minor poc and price back above this level would be a stronger location but as long as ES holds above 1971.00, the 1/2R off this year’s high it is in a strong price location in the longer timeframe.
We are still looking for the further positive of Key Chart IWM (Small Caps) overcoming its proven Resistance, see below.
First Level Support = ES 2020.50 (21dy poc)
Second Level Support = ES 1971.00 (1/2R off this year’s high)
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 67%), Nasdaq 49% (from 55%), R2000 54% (from 62%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was lower at 4.32. Last week the ratio reached a 30day high at 4.90. However, on 10/05 the ratio recorded 3.09 which was a two year low.
Supporting Charts:
Bonds TLT: has been consolidating for three weeks above the 121.40 Support (12mn poc) and needs to hold this level to remain in a strong price location.
Dollar Index: in September rallied back to the Resistance at 96.50 (1/2R off this year’s high) without overcoming it and fell from there. Is currently printing back above 94.67, the 12mn poc.
Gold GLD: broke above the August high last week to print its highest level since June. Resistance at 115.12, the 12mn poc.
Oil USO: recently found Support at the 1/2R off August low rallied from there to test the August high. 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 higher open today.
EURUSD: is today printing just below 1.1340 (12mn poc) and must print above this level to maintain a strong price location.
