Technical analysis – Market pre-open 1st March 2016
See previous highlighted comments. On Monday an early probe of First Level Resistance at 1956.90 was rejected, see chart. This is the 1/2R off last year’s high and the natural Resistance in a bear trend, so this is a crucial point for this rally. Price above this level would be a big positive. Later in the day Significant Selling (red-at-bottom) was marked for the first time in fifteen days – price printing above Monday’s high would negate any ST negative implications of that imbalance. In the ST ES has to hold above the 1886.50 Support to keep the rally intact and the more important LT Support at 1870.
First Level Support/Resistance = 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)
Key Charts/Levels: DIA closed above 164.25, its maj poc. Also watching 166.96, the 1/2R off last year’s high, which is proving to be Resistance. Price printing time above this level would be a further positive. QQQ closed above 101.30, its maj poc.
Stocks>50dyma numbers: Nyse 59% (from 58%), Nasdaq 46% (unch), R2000 50% (from 49%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was slightly lower at 3.16. The rydex traders have been very slow to get on this rally. This is a contrarian indicator. One week ago the ratio fell to 2.64 which was the lowest since November 2012.
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.
Dollar Index: LT – on 02/11 found Support at 95.22, the 12mn poc. Higher from there and Bulls would want to see that level hold. ST – Currently the chart is printing above 97.87, the 1/2R off this years high, in a stronger price location.
Gold: GLD has rallied strongly and is printing above 115.12, the 24mn poc, which is now Support.
Oil: is printing above the minor 1/2R off the January low. Bulls (and equity Bulls) would want to see that level hold.
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 AND is today printing below 1.0925, the 12mn poc in a weak price location. Time below this level would suggest a retest of last year’s low.
