Technical analysis – Market pre-open 16th February 2016
Aggressive Buying was marked on Friday for the first time this month. In the longer timeframe this can be viewed as Reactive because it was below the 1870 poc. All of last week’s Value Areas were generated below 1870 and that is weak price location, see previous comments. However, overnight ES rallied and is currently printing above 1870. Bulls would want to see ES hold that level.
Dayframe: 1886.50 is the 55dy poc and price relative to that level post-open may provide a clue re ST direction.
Support/Resistance = ES 1886.50 (55 day poc)
First Level Support = ES 1870 (previous maj poc)
Stocks>50dyma numbers at end of last week: Nyse 26%, Nasdaq 18%, R2000 19%. Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio ended the week at 3.50 having fallen to 3.37 earlier in the week 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. On 12/29 the ratio reached 9.17.
Supporting Charts:
Bonds IEF, the 7-10 yr ETF: Held the major Support at 105.00 following October’s decline and has rallied strongly. On Thursday last chart spiked to a new high but was lower on Friday and futures indicate a lower open today.
Dollar Index: found Support last week at 95.22, the 12mn poc. Higher from there and Bulls would want to see that level hold.
Gold: gold has rallied strongly and now prints above 115.12, the 24mn poc, which is now Support.
Oil: earlier today oil was printing strongly higher but has given up those gains as of one hour pre-open and is printing back below the 1/2R off the January low which is weak price location.
EURUSD: last week probed above 1.1241, the Major 1/2R, but is off that level. First Level Support is at 1.1085, the 1/2R off last year’s low.
