Technical Analysis – Market pre-open 26th January 2016
See previous comments. I marked Aggressive Selling on Monday but the session held the 1870 Support. Most of the session was spent consolidating above 1880, hence the Value Area was generated entirely above this level, and only a late oil-realated sell-off triggered the red-at-low mark so I’m not convinced this is “Effective” Selling. Even so I need to see Effective Buying marked above 1870 before considering the long-side on any timeframe. Overnight ES weakened further (see note below) but has bounced back.
First Level Support/Resistance = ES 1870 (previous poc)
Dayframe: The v min 1/2R off last week’s low is at 1854.50. Price printing time below that level would indicate a retest of the low. Overnight it was slightly tested and thirty minutes pre-open ES has bounced back to print just above the 1870 poc.
Key Charts: Support: SPY 187.20 poc – key for the Bulls that this level holds. DIA Resistance at its major poc at 63.75. If the market manages to sustain a rally, this level would be key.
Stocks>50dyma numbers: Nyse 12% (from 14%), Nasdaq 12% (from 15%), R2000 11% (from 14%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was almost unchanged at 3.80. On 12/29 the ratio reached 9.17. Last week it fell to 3.52 which is as low as it has been for two years except for the sell-off late last year when the ratio fell to 3.00.
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 well 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.
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: has today printed a 59day high. Chart is still in a LT weak price location though.
Oil: The price of Oil has caused major problems for equity markets but rallied strongly from last week’s low. Sold off sharply on Monday but bouncing back 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. Chart has been in a range since early December but today is printing below 1.0925, the 12mn poc, in a weak price location.
