Technical analysis – Market pre-open 26th February 2016
See previous highlighted comments. On Thursday I marked Aggressive Buying (green-at-top) and overnight ES has printed as high as 1968.75 which is above 1956.90, the 1/2R off last year’s high, which is now Support and puts the chart in a stronger price location. Breadth improved. Rydex traders slow to respond, see below.
First Level Support = 1956.90 (1/2R off last year’s high)
Second Level Support = ES 1886.50 (70 day poc)
Major Support (major) = ES 1870 (previous maj poc)
Stock index ETFS: DIA closed just above 164.25, its maj poc. QQQ closed above 101.30, its maj poc. Bulls would want to see these levels hold
Stocks>50dyma numbers: Nyse 56% (from 50%), Nasdaq 42% (from 39%), R2000 46% (from 41%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was higher at 3.21. This is a 7day high with SPY at a 32day high. Rydex traders have little faith in this rally. This is a contrarian indicator. Last Friday’s ratio at 2.64 was the lowest since November 2012. On Monday, Bear Fund assets that I follow reached their highest level since late 2011.
Supporting Charts:
Bonds IEF, the 7-10 yr ETF: Held the major Support at 105.00 following October’s decline and rallied strongly. On 02/11 the chart spiked to a new high – is off that level and printing below the minor 1/2R off this year’s high. Futures indicate a lower open today.
Dollar Index: on 02/11 found Support at 95.22, the 12mn poc. Higher from there and Bulls would want to see that level hold. Resistance at 97.87, the 1/2R off this years high, came into play on Wednesday and was the high. Currently close to that level.
Gold: GLD has rallied strongly and now prints above 115.12, the 24mn poc, which is now Support.
Oil: is printing bove the minor 1/2R off the January low. Bulls (and equity Bulls) would want to see that level hold. Higher today.
EURUSD: earlier in the month probed above 1.1241, the Major 1/2R, but is off that level and is now printing below 1.1085, the 1/2R off last year’s low. Next Support is 1.0925, the 12mn poc, price printing time below that level would suggest a retest of that low.
