Technical analysis – Market pre-open 10th February 2016
See previous comments. Intraday Buyers were active on Tuesday and managed to generate an overlapping/higher Value Area. Market closed flat despite another sell-off in oil. Overnight ES has probed the First Level Resistance at 1870. It would be a positive if price can print some time above that level. Price below that poc is weak location. Staying cautious here especially with price Momentum and breadth remaining weak.
First Level Support/Resistance = ES 1870 (previous maj poc)
Last week Key Chart DIA probed 63.75, its major poc but has yet to print any time above that level.
Stocks>50dyma numbers: Nyse 23% (unch), Nasdaq 14% (from 15%), R2000 15% (from 16%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was almost unchanged at 3.37 which is as low as it has been for two years except for the sell-off late last year when the ratio fell to 3.00.
Supporting Charts:
Bonds IEF, the 7-10 yr ETF: Held the major Support at 105.00 following October’s decline and has rallied strongly to a new high this week. Futures indicate a lower open today.
Dollar Index: A probe in early December above the March high was rejected and on Tuesday the chart printed its lowest level since then.
Gold: GLD has rallied strongly benefiting from the risk-off tone and weaker dollar and has printed its highest level since June which approached First Level LT Resistance at 115.12 (24mn poc). Cash gold indicates a lower open today.
Oil: rallied strongly off the low in January but this week has been printing back below the 1/2R off that low in a weak price location once again. Sold off hard on Tuesday. Equity Bulls would want to see oil printing above that level.
EURUSD: currently printing above the Major 1/2R Resistance at 1.1241. in a stronger price location.
