Technical Analysis – Market pre-open 20th January 2016
See previous comments. Overnight ES has printed a new low for this move, below 1830. Pre-open it is printing above 1840 but the important level is 1870 so this is very weak price location. Bulls would want to see ES back above this (now Resistance) level as quickly as possible.
Key Charts: DIA closed below its major poc (now 63.75) on Tuesday. Bulls would want to see DIA recover back above this level as soon as possible. Also monitor SPY relative to the 187.20 poc, price printing time below that level would indicate more weakness.
First Level Resistance = ES 1870 (previous poc)
Stocks>50dyma numbers: Nyse 10% (from 9%), Nasdaq 9% (from 10%), R2000 9% (from 8%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio fell to 4.07 on Tuesday which is the lowest ratio since 13th October. The ratio as high as 9.17 on 12.29. Fear has now been registered in this indicator.
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. There is Support now at 107.17 which is the 1/2R off last year’s high. 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 and the index is printing just above that level today.
Gold GLD: printed a 44day high earlier in the month as investors sought safe haven. Chart is still in a LT weak price location though.
Oil: lower again today, reaching its lowest level since 2003 and causing major problems for equity markets.
EURUSD: The rally from the November low approached, but did not test, the First Level Resistance at 1.1080, 1/2R off March low. Chart has been consolidating since early December and I am watching to see if the current 12mn poc will migrate lower.
