Technical Analysis – Market pre-open 7th March 2016
Last week Aggressive Buying was marked on Tuesday and again on Thursday, both times above 1956.90, the 1/2R off last year’s high. This is now First Level Support. Friday closed above Mon-Wed Hi-Lo Range indicating Buyers Active on the weekly timeframe. Breadth and Price Momentum are positive, see Pulse Chart, and retail investors still do not trust this rally, see Sentiment, 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)
Market Charts: all major Market Charts are positive.
Stocks>50dyma numbers: Nyse 82%, Nasdaq 66%, R2000 71%. Numbers >50 are supportive.
Sentiment:My version of the Rydex Assets Ratio ended the week at 3.13. The market was up strongly last week but the ratio fell. The rydex traders are being very slow to get on this rally. This is a contrarian indicator. Ten days ago the ratio fell to 2.64 which was the lowest since November 2012.
Supporting Charts:
Bonds IEF, the 7-10 yr ETF: On 02/11 the chart spiked to a new high but is off that level and printed a 24 day low on Friday.
Dollar Index: is today printing just above 97.40, the 2year poc. Price printing time below this level would be weaker location. Price above 97.87, the 1/2R off November high, would be a stronger price location.
Gold: GLD has rallied strongly and is printing above 115.12, the 24mn poc, which is now Support. On Friday cash gold printed its highest level since Feb 2015.
Oil: is today printing a two month high.
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. Price below 1.0925, the 12mn poc would suggest a retest of last year’s low.
