Stock market today 22nd September 2016
ES analysis: Wednesday was a constructive day. Early in the session another probe above 2142.25, the 1/2R off the August high, was rejected and ES sold down to test the 2135 minor (12day) poc. This was also rejected and ES subsequently auctioned higher to break above the 1/2R level that had been proven intra-day Resistance for four days. Aggressive Buying (green-at-top) was marked and as long as ES holds 2135.00 it is in a strong price location in the ST and as long as it holds above 2087.00 it is in a strong price location in the LT. The Pulse Chart has shown some slight improvement with the Momentum (PriceOsc) ticking up (although still negative) – same for IWM and DIA. Breadth on the Pulse Chart is still red, so this needs to confirm.
First Level Resistance = 2142.25 (1/2R off August high, Dec contract)
First Level Support = 2135.00 (minor poc)
Major poc Support = 2087.00
Stocks>50dyma numbers: Nyse 48% (from 35%), Nasdaq 58% (from 53%), R2000 55% (from 48%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was lower at 5.95, a 36 day low. Market up – ratio down is usually a positive sign. The ratio reached 7.9 on 08/26, a seven month high.
Supporting Charts:
Bonds: TLT – following the weak pattern in August (see previous analysis) the chart has fallen sharply reaching a twelve week low last week. Following the Fed announcemnet on Wednesday, TLT rallied to close at a nine day high. The 1/2R Resistance off the June high is now at 138.33.
Dollar Index: The 1/2R off Dec high Resistance is at 96.21. This was probed and rejected yesterday and UDX is lower today. Price above that level would put the chart in a stronger position. Support lower at 94.76 (2yr poc).
Gold: with the dollar lower Gold rallied yesterday to close at a nine day high. Resistance at 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).
Oil: USO – closed above 10.06 (1/2R off Feb low) on Wednesday. Resistance at 10.78, the 18mn poc. Price above that level would be a positive.
EURUSD: in August found Support at 1.1139, the 4yr poc and the chart is again printing up off that level in a strong price location.
click to enlarge graphic
