Market breadth deteriorates – Market pre-open Report Wednesday 14th September 2016
ES analysis: See Monday’s comments. ES recovered some ground on Monday but Tuesday’s session generated a lower Value Area with most time spent around the 2120 level. Breadth deteriorated, see below and Pulse Chart. Note that we are now following the December contract and the 1/2R off the August high for this contract is 2142.25. Unless price can recover back above this level it is in a very weak price location.
For reference here are the equivalent 1/2R for SPY and IWM – (note that these will change if the charts make new lows for this move). SPY = 215.95 IWM = 122.66
Dayframe: in the very minor timeframe the 1/2R off this week’s low is at 2128.00. Overnight ES has probed this level but has not printed any time above it. Good reference level for today.
First Level Resistance = 2142.25 (1/2R off August high, Dec contract)
Major poc Support = 2087.00
Stocks>50dyma numbers: Nyse 34% (from 48%), Nasdaq 50% (from 58%), R2000 44% (from 57%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was lower at 7.11. The ratio reached 7.9 on 08/26, a seven month high. As mentioned yesterday Rydex Bull fund assets reached a 10 day high on Monday – suggesting the Rydex traders were buying the dip and that’s a little worrying.
Supporting Charts:
Bonds: TLT – following the weak pattern in August (see previous analysis) the chart has fallen sharply with Tuesday’s decline seeing TLT at a twelve week low.
Dollar Index: last week tested the Support at 94.76 (2yr poc) and has so far held. Price below that level would immediately put UDX in a weak position.
Gold: GLD is printing below 127.85 (1/2R off July high). This is weak price location in the ST. The major poc Support is at 118.22 (maj poc) – there is a possibility that poc could migrate higher – I am watching for that.
Oil: USO – closed on Tuesday below 10.78, the 18mn poc. There is Support at 10.07, the 1/2R off this year’s low and this held a test recently. Price printing time below this level would indicate further weakness.
EURUSD: recently found Support at 1.1139, the 4yr poc and currently the chart is printing above that level. There is also Support lower at 1.1083, 1/2R of last year’s low.
click graphic to enlarge
