Technical analysis – Market pre-open 8th February 2016
See previous comments. On Friday I marked Aggressive Selling for the second time in the week. The Value Area was lower and wider but held above the 1870 Support. Overnight though global equitie have fallen and pre-open ES has printed below that Support and below 1850.00. This puts the chart in a weakened price location and Bulls would want to see ES recover 1870 as soon as possible. Staying cautious here especially with price Momentum and breadth remaining weak.
First Level Resistance = ES 1870 (previous maj poc)
Last week Key Chart DIA probed 63.75, its major poc but has yet to print any time above that level.
Market Charts: all major markets charts remained negative.
Stocks>50dyma numbers: Nyse 26%, Nasdaq 17%, R2000 16%. Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio ended the week at 3.63. On 12/29 the ratio reached 9.17. On 01/21 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 has rallied strongly to its highest level since January 2015. Futures indicate a higher open today.
Dollar Index: A probe in early December above the March high was rejected. The chart has been climbing back from the December low but fell sharply last week and broke that low.
Gold: benefiting from the risk-off tone and weaker dollar and has printed its highest level since October. But is still in a LT weak price location.
Oil: rallied strongly off the low in January but is currently printing back below the 1/2R off that low in a weak price location once again. Equity Bulls would want to see oil printing above that level.
EURUSD: rallied last week to probe the Major 1/2R Resistance at 1.1241. Has yet to print time above that level.
