Technical analysis – Market pre-open 14th March 2016
We saw a series of Values Areas at higher levels consolidating around 1990 which emerged as a minor (30day) poc. Price relative to that level may be useful to monitor as a guide to ST strength/weakness at the start of this week. In the LT, as long as ES holds above 1956.90, the 1/2R off last year’s high, it is in a strong price location. On Friday ES printed a new high for this rally.
With the breadth numbers supportive, see below, and sentiment still indicating lots of bears I would want to see Significant Selling (red) marked below 1956.90 before considering the short side.
First Level Support = 1990 (30day poc)
Second Level Support = 1956.90 (1/2R off last year’s high)
Major Support (major) = ES 1870 (previous maj poc)
Market Charts: all major Market Charts are positive.
Stocks>50dyma numbers: Nyse 88%, Nasdaq 73%, R2000 78%%, UK 61%. Numbers >50 are supportive.
My version of the Rydex Assets Ratio ended the week at 3.86. The rydex traders remain reluctant to back this rally. This is a contrarian indicator. On 02/19 the ratio fell to 2.64 which was the lowest since November 2012.
Supporting Charts:
Bonds TLT ETF: On 02/11 the chart spiked to a new high but is off that level. Support at 126.70 (1/2R level).
Dollar Index: is today printing below 97.40, the 2year poc. Time below this level would suggest further weakness. 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 115.50, the major poc, which is now Support.
Oil, USO: printed a two month high last week. Support at 9.00, the 5mn poc.
EURUSD: 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.
