Technical analysis – Market pre-open 8th January 2016
See previous comments. Thursday’s session opened sharply lower and an early probe up into First Level Resistance at 1965.25 (1/R off last year’s high) was rejected. The Value was generated below this level. Pre-open today ES has printed back up towards this level.
Second Level Resistance = 2043.00 (1/2R off November’s high, Mar contract)
First Level Resistance = 1965.25 (1/R off last year’s high)
Key Charts
Resistance: SPY, key level is 198.10 (1/2R off last year’s high) and chart broke below that level yesterday. Time printed below 198.10 is very weak price location.
Support: DIA. 164.00 was previously the maj poc. Time below this level would be a further negative.
Breadth numbers are weak and price momentum (PriceOsc) for all four major stock index ETFs remains negative and down.
Stocks>50dyma numbers: Nyse 15% (from 22%), Nasdaq 16% (from 22%), R2000 15% (from 21%). Numbers >50 are supportive.
Sentiment: See Tuesday’s comments re the Rydex Assets Ratio. On Thursday the ratio fell to 6.59 which is a 45 day low. This is down 28% from 9.17 reached on 12/29. This indicates some fear. More about this in today’s video.
Supporting Charts:
Bonds IEF, the 7-10 yr ETF: Held the major Support at 105.00 following October’s decline and rallied. Closed above the Resistance at 106.60 (18mn poc) but futures indicate a lower open today. Next directional move will likely be signalled by a solid break from this range.
Dollar Index: A probe in early December above the March high was rejected. The minor 1/2R off that high is at 98.85 and the index is printing at that level today.
Gold GLD: printed a 44day high on Thursday as investors sought safe haven. Chart is still in a LT weak price location though.
Oil: closed below 2008’s low at its lowest level since 2004.
EURUSD: The rally from the November low approached, but did not test, the First Level Resistance at 1.1080, 1/2R off March low.
