Small caps at 12 month high – IWM reaches highest level since since 17th July last year.
Market recovered from early weakness yesterday with Small caps as represented by the Russell 2000 reaching a new twelve month high.
ES analysis: Wednesday’s session exceeded Tuesday’s green-at-top high (80% reliability). Following an early sell-off ES recovered and note that the Value Area was generated entirely above the 4mn poc, see Wednesday’s comments. Price relative to this level should be monitored as a guide to ST strength. Overnight ES printed as high as 2189.25.
First Level Support/Resistance = 2180.50 (4mn poc)
Major poc Support = 2087.00
Stocks>50dyma numbers: Nyse 68% (from 64%), Nasdaq 69% (from 68%), R2000 72% (from 70%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was lower at 6.68. The ratio reached 7.9 on 08/26, a seven month high.
Supporting Charts:
Bonds: TLT – closed on Tuesday back above 139.00, the 4mn poc. The next Resistnce is 140.34 which is the 1/2R off the July high and since the beginning of August every probe into that level has failed. And again yesterday. Price above this level would be a positive.
Dollar Index: last week probed the Resistance at 96.21 which is the 1/2R off last year’s high and fell from there to test the Support at 94.76 (2yr poc) and currently UDX is printing just below that level.
Gold: GLD closed on Thursday last week at its lowest level since June but has rallied back this week and closed Wednesday above 127.85 (1/2R off July high) in a strong price location. 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 – last week USO broke below 10.78, the 18mn poc and is now in a weaker price location. However it has found Support at 10.07, the 1/2R off this year’s low. Price printing time below this level would indicate further weakness.
EURUSD: recently found Support at 1.1139, the 4yr poc and has rallied. There is also Support lower at 1.1083, 1/2R of last year’s low.
click graphic to enlarge
