Tuesday’s session found low at the minor poc at 2634.50. Wednesday’s session generated a higher, wider Value Area and Aggressive Buying was marked. Overnight the 3mn poc at 2686 and the 1/2R at 2704 have been exceeded and these levels are now Support. A Value Area generated above 2686 would be a further positive. In the longer term the 5mn Support at 2581 is the level to watch. So far Value Areas have been generated above that price, see chart. A Value Area printed below 2581 would be an indication of further weakness. Breadth and PriceMomentum need to improve, see Pulse chart.
Support 1 = 2704 (1/2R off Jan high)
Support 2 = 2686.00 (3mn poc)
Support 3 = 2581.00 (5mn poc)
Stocks>50dyma numbers: Nyse 32% (from 23%), Nasdaq 39% (from 29%), R2000 32% (from 23%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was lower again at 11.10, a four month low. The ratio reached 27.55 on 01/30, the highest ratio in the database.
Bonds: TLT – Had been printing below 119.00, the major Support (maj poc) for a few days which is a weak position. Closed on Wednesday at the lowest level since March 2017.
Dollar Index: in early July chart broke below 95.50, the major poc = weak LT price location. 12/28 broke below the 1/2R Support off the Sep low and then broke the September low. On 01/26 the index printed its lowest level since December 2014. There is Support at 87.25 which is the 1/2R off 2008 low.
Gold – GLD: in mid December the major poc migrated back up to 121.00 – the chart rallied strongly from there and on 01/25 printed its highest level since August 2016. After dipping GLD closed back above 126.60, the 2mn poc, on Wednesday in a strong price location.
Oil: USO – 01/25 chart reached its highest level since November 2015 but was sharply lower last week in line with the equity sell-off.
GBPUSD: 01/25 reached its highest level (1.4344) since June 2016.
EURUSD: in December chart tested the 1 year poc Support at 1.1755 and held. 01/25 printed its highest level since December 2014. Off a little recently to test (and hold) the Support at 1.2264, the 2mn poc – today looks to be approaching the December high.
USDJPY: two failed probes into the 113.70 maj poc Resistance in December and has been printing below 111.30, the 2yr poc, in a weak price location since then. Chart has now broken below the 1/2R off the 2016 low which further weakens the price location and is now printing at its lowest level since Nov 2016.
