Technical analysis – Market pre-open 31st December 2015
Volume is thin and Value Areas are narrow. Therefore the Buying and Selling imbalances are most likely unreliable. I marked Aggressive Selling on Wednesday but ES held above 2052, the minor poc. See Key Chart IWM, below.
Dayframe: the minor (22day) poc is at 2052.00. Price relative to this level may be worth watching this week.
Resistance 2087.00 (5mn poc) to 2094.00 (maj poc)
First Level Support = 2043.00 (1/2R off November’s high, Mar contract)
Second Level Support = 1965.25 (1/R off this year’s high)
U.S. breadth numbers remain below 50, see below, but momentum (PriceOsc), although still negative for all four major stock index ETFs, is heading up.
Key Chart IWM: Resistance at 115.35 (maj poc)…has been the exact high this week.
Stocks>50dyma numbers: Nyse 37% (from 44%), Nasdaq 44% (from 49%), R2000 40% (from 46%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was lower at 8.60. Tuesday’s ratio at 9.17 is a four month high and the first time the ratio has been above 9.0 since 18th August.
Supporting Charts:
Bonds IEF, the 7-10 yr ETF: last week found Resistance at 106.60 (18mn poc) and is lower from there. 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: recently printed a new five year low. Still in a very weak price location.
Oil: printed a new six year low last week but rallied strongly from there but lower so far this week.
EURUSD: The rally from the November low approached, but did not test, the First Level Resistance at 1.1080, 1/2R off March low.
