Technical analysis – Market pre-open 12th January
See previous comments. Sellers have been (and most likely still are) in contraol of the dayframe. The recent red-at-bottom lows have all been tested the following day and whenever Sellers are active intraday they are effectively generating lower Value Areas. However, as I wrote yesterday, the market is oversold and could be ready for a bounce. At current levels recovery back above 1965.25 would be the first sign of strength. I note that oil and copper hit new lows this week but SPY is higher. Also see Rydex ratio, below.
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 Chart DIA: Key Chart DIA has tested but so far, not broken the Support at 64.00. Time below this level would be a further negative. Price momentum (PriceOsc) for all four major stock index ETFs remains negative and down.
Stocks>50dyma numbers: Nyse 14% (from 13%), Nasdaq 12% (unch), R2000 12% (unch). Numbers >50 are supportive.
Sentiment: See Tuesday’s comments re the Rydex Assets Ratio. My version of the Rydex Assets Ratio was lower at 5.73 which is now down 37% from the four month high reached on 12/29. Some fear registering here.
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) on Monday.
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 just above that level today.
Gold GLD: printed a 44day high last week 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.
