Technical analysis – Monday 26th October 2015
Please read previous highlighted comments. ES closed strong for the week having probed above 2070 on Friday, a level where I suspect the current distribution will become stretched. Acceptance of price around 2070 would be a further positive.
The disparity between the performance of Large Caps and Small Caps is striking. IWM closed on Friday just above 115.35 its key level. A further positive for the general market would be to see IWM print time above that price. And UK FTSE100 above 6445.50.
First Level Support = ES 2020.50 (23dy poc)
Second Level Support = ES 1971.00 (1/2R off this year’s high)
Market Charts: Nyse stayed positive, Nasdaq turned positive, R2000 and UK stayed neutral.
Stocks>50dyma numbers: Nyse 71%, Nasdaq 59%, R2000 64%, UK 66%. Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio ended the week at 5.03 with Thursday’s ratio at 5.38 being a 38day high. 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: is today printing above 96.50 (1/2R off this year’s high). Price needs to hold this level to remain in a strong price location.
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. A test the August high was then rejected and USO fell sharply. The 1/2R Support off the August low is now at 14.28 and USO will likely test that today.
EURUSD: is today printing below 1.11 (1/2R off this year’s low) in a weaker price location.
