Technical analysis – Market pre-open 29th October 2015
As mentioned yesterday enough time was printed at 2063.00 to migrate the five month poc to that level. And on Wednesday the more minor poc (of what I assume to be the current distribution) also moved to this level. For this reason the assumption that I previously made that the “distribution would likely become stretched above 2070” no longer applies. However, 2063.00 is now the important level to monitor and ES needs to hold this level to remain in a ST strong price location. We need to closely monitor the Rydex ratio as well, see below.
I note that SmallCaps (IWM) had a strong day on Wednesday and closed above 115.35, its key level. Hopefully this is an indication that the rally is broadening out in its breadth. UK FTSE100 was rejected again at its important level of 6445.50.
First Level Support = 2063.00 (5mn poc)
Major Support = ES 1971.00 (1/2R off this year’s high)
Stocks>50dyma numbers: Nyse 71% (from 60%), Nasdaq 61% (from 51%), R2000 66% (from 53%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was higher at 6.27, a 43day high. Bull fund assets that I follow have increased by 30% this week. 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: found exact Support on Wednesday at 96.50 (1/2R off this year’s high) and rallied strongly. Price needs to hold this level to remain in a strong price location.
Gold GLD: recently printed its highest level since June. Resistance at 115.12, the 12mn poc. Momentum (PriceOsc) is positive but down.
Oil USO: The 1/2R off the August low is now at 14.28 and USO closed above that level following a strong day on Wednesday. Futures indicate a lower open today.
EURUSD: is today printing below 1.11 (1/2R off this year’s low) in a weak price location.
