Technical analysis – Market pre-open 21st December 2015
Price action was poor at the end of last week. Thursday saw a test of the previous day’s low negating any ST positive implications of Wednesday’s Aggressive Buying and ES finished the session below 2043 (min 1/2R) in a weak price location. Aggressive Selling (red-at-bottom) was marked on Friday and Breadth deteriorated.
Bulls would want to see (as a minimum) Breadth improve, see below, and Momentum turn up, see Pulse Chart.
Resistance 2087.00 (5mn poc) to 2094.00 (maj poc)
First Level Resistance = 2043.00 (1/2R off November’s high, Mar contract)
Support = 1965.25 (1/R off this year’s high)
Key Charts/Levels:
IWM: Resistance at 115.35 (maj poc)
SPY: Support at 198.10 (1/2R off this year’s high)
Market Charts: All major market charts remained negative except R2000 which turned neutral.
Stocks>50dyma numbers: Nyse 22%, Nasdaq 34%, R2000 29%. Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio ended the week at 6.99. The recent 32day low for the ratio is 6.62. On 12/01 ratio reached 9.00 which was a 70day high.
Supporting Charts:
Bonds IEF, the 7-10 yr ETF: closed just below the 106.60 (18mn poc) Resistance. There is Support at 105.00, the major poc. Next directional move will likely be signalled by a solid break from this range.
Dollar Index: A probe earlier in the month above the March high was rejected. The minor 1/2R off that high is at 98.85. Dollar Bulls would want to see the index printing above that level.
Gold GLD: Printed a new five year low last week. Still in a very weak price location.
Oil: printed a new six year low on Friday.
EURUSD: The rally from the November low approached, but did not test, the First Level Resistance at 1.1080, 1/2R off March low.
