Technical analysis – Market pre-open 14th January 2016
See previous comments. Sellers were active intraday on Wednesday, see highlighted numbers. An “outside” Value Area was generated but ES ended the session on its lows.
Key Chart DIA closed below its major poc (64.00) on Wednesday. Bulls would want to see DIA recover back above this level as soon as possible. Price momentum (PriceOsc) for all four major stock index ETFs remains negative and down.
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)
Stocks>50dyma numbers: Nyse 9% (from 13%), Nasdaq 9% (from 13%), R2000 8% (from 12%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Ratio was lower at 5.23. Some fear has been registered in this indicator. VIX however is registering a surprising level of complacency closing just above 25, almost the same as one month ago before the current sell-off started.
Supporting Charts:
Bonds IEF, the 7-10 yr ETF: Held the major Support at 105.00 following October’s decline and rallied. Now printing time above 106.60 (18mn poc) in a stronger price location.
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: lower again this week, reaching 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.
