Technical analysis – Market pre-open 11th December 2015
Buyers were active intraday on Tuesday and again on Thursday but were Ineffective on both days generating lower or inside Value Areas. In contrast the Selling on Wednesday was Effective generating a lower Value Area. Wednesday’s red-at-bottom low will likely be tested during today’s session as ES is printing close to that low thirty minutes pre-open. If the distribution which began early October (see previous highlighted comment) is still valid then I will be interested to see how Buyers react if the VAL of that distribution at 2025 is tested.
Key Charts: IWM (R2000 ETF) – closed below 115.35, the Major poc, in a weak price location.
Second Level Resistance 2087.00 (5mn poc) to 2094.00 (maj poc)
First Level Resistance = 2054.50 (1/2R off the November high)
Breadth deteriorated again, see below.
Stocks>50dyma numbers: Nyse 32% (from 34%), Nasdaq 42% (unch), R2000 39% (from 40%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was almost unchanged (again) at 8.36. Last week the ratio reached 9.00 which was a 70day high.
Supporting Charts:
Bonds IEF, the 7-10 yr ETF: probed the Resistance at 106.60 (18mn poc) last week. This was rejected but the chart has held the 105.00 (major poc) Support and is up from there. Price below that level would be weak price location.
Dollar Index: last week printed its highest level since the March high but sharply lower on Thusday following the ECB announcement. Momentum is negative and down.
Gold GLD: cash Gold printed a new five year low last week. Very weak price location.
Oil: broke below the August low on Monday to a six year low and futures have printed a new low today.
EURUSD: last week printed its lowest level since April but sharply higher at the end of the week following the ECB announcement and is currently printing close to the high of this rally. First Level Resistance at 1.1080, 1/2R off March low.
