Technical analysis – Market pre-open 6th January 2016
See yesterday’s highlighted comments. Tuesday generated a higher Value Area but overnight ES weakened again and as of thirty minutes pre-open has printed as low as 1971.25. I would want to see Significant Buying (green) marked before considering the long side on any timeframe. See Support level on SPY, below.
Second Level 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: SPY, there is Support at 198.10 (1/2R off last year’s high) and the low this week has been close to this level. See Pulse Chart. Price printing time below that 1/2R would be an indication of further weakness. Also note that important indices, e.g. Dax, Ftse100 are now printing below their 1/2R off the August lows in weak price locations.
Breadth numbers are weak and price momentum (PriceOsc) for all four major stock index ETFs remains negative and have turned down.
Stocks>50dyma numbers: Nyse 25% (from 22%), Nasdaq 26% (unch), R2000 23% (from 21%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was lower, but only slightly, to 8.22. See yesterday’s highlighted comments.
Supporting Charts:
Bonds IEF, the 7-10 yr ETF: recently 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. Futures indicate a higher open today.
Dollar Index: A probe in early December above the March high was rejected. The minor 1/2R off that high is at 98.85, the index is printing above that level today in a strong price location.
Gold GLD: recently printed a new five year low. Still in a very weak price location.
Oil: printed a new six year low on 12/21, bounced, but is printing back close to that low today.
EURUSD: The rally from the November low approached, but did not test, the First Level Resistance at 1.1080, 1/2R off March low. Printed a 23day low yesterday.
