Technical analysis – Market pre-open 3rd March 2016
Tuesday was a constructive day. Aggressive Buying was marked above 1956.90, the 1/2R off last year’s high. This is now First Level Support. Wednesday’s session generated a Value Area above that level.
Breadth numbers improved again, 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)
Key Charts/Levels: DIA closed above 164.25, its maj poc and above 166.96, the 1/2R off last year’s high, in a strong price location. Price printing time above this level would be a further positive.
Stocks>50dyma numbers: Nyse 74% (from 69%), Nasdaq 60% (from 55%), R2000 65% (from 61%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was lower at 3.66. Down from Tuesday’s 4.24 which was a 17day high. The rydex traders have been very slow to get on this rally. This is a contrarian indicator. The ratio recently 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 yesterday printed a 21 day low.
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: on Wednesday printed its highest level since 6th January.
EURUSD: earlier in the month probed above 1.1241, the Major 1/2R, but is
