pre-open Monday 5th November 2018 – from Chartprofit
I wrote on Tuesday last week >>yesterday’s session low was a test of the 12month Value Area low at 2605 (dashed line). If this is a correction in an ongoing bull market I would expect a test of a major VAL to be rejected, i.e. the market rallies….I would want to see ES printing back above 2718 before assuming any strength.<<
The market rallied last week following that test. Value Areas on Wed/Thu/Fri were in the area of 2718, the maj poc. Pre-open today ES is printing above that level. Bulls would want to see ES hold 2718 now. Price spending time back below that level would be a weakened position. Significant Buying (green) marked above 2718 and improvement in the Breadth numbers, see below, would be further positives. A slight concern in my mind is the fact that after such a sharp sell-off we didn’t see more capitulation in the Sentiment numbers.
ETFs: Major Levels. SPY = 271.7, IWM = 153.5.
Market Charts: All major Market Charts remained negative.
Stocks>50dyma numbers: Nyse 23%, Nasdaq 26%, R2000 23%. Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio ended the week at 12.32. On 10/22 the ratio fell to 8.68which was the lowest ratio in more than a year. The peak reading is 27.55 recorded 09/07 which equalled the highest ratio in the database.
Bonds: TLT – declined sharply since breaking below 121.00, the major poc, at the start of September. On friday, broke lower and printed its lowest level since Jul 2014.
Dollar Index: Midweek, last week, DXY probed above the August high (its highest level since June 2017). This was rejected and DXY fell sharply. Has rallied a little. The major poc is at 94.80 and chart printed a higher low at that Support earlier in the month.
Gold: GLD – The major poc is at 121.00 and this Support was broken 06/19. Chart remains in a LT weak position but has rallied recently. It is possible the poc could migrate lower with time – I am monitoring that.
Oil: USO – As long as chart holds above 12.79, the 12mn Support, it is in a LT strong price location. We need to watch for that poc migrating higher. USO has retraced from the 10/03 high and on Friday printed its lowest level since June.
GBPUSD: rallied strongly last week but is still in a weak LT location. There is Support/Resistance is 1.2978, the minor 1/2R off the August low, and major Resistance at 1.3200, the major poc.
EURUSD: On 08/15 the chart printed its lowest level since July 2017. There was a rally back from there to probe 1.1755, the 1year poc Resistance. This was rejected and the chart declined from there to approach the August low. Chart remains in a weak price location.
USDJPY: the major poc is at 111.30. Chart is printing above that level and looks to have formed a higher low at that poc.
