Technical analysis – Market pre-open 17th May 2016
See previous comments. The Aggressive Buying on 05/10 and Aggressive Selling 05/13 imbalances did see any follow on price action. This is unusual because 80% of the time they do within a day (or two). We have seen before that this often indicates that a price in the range is “attractive” and that a poc is developing. One of the levels I have suggested may attract time is 2056 and that needs to be monitored. Yesterday Aggressive Buying (green-at-top) auctioned ES up to our First Level Resistance at 2068. So far no time has been printed above that level. Personally, I would rather see that happen before considering new longs.
First Level Resistance = 2068.00 dashed line (minor 1/2R off April high)
Second Level Resistance = 2086.00 (1mn poc)
First Level Support = 2041.00 (8mn poc)
KEY Chart: The 1/2R off last years high for IWM is at 111.38. Chart closed below that level on Monday in a weak price location.
Stocks>50dyma numbers: Nyse 57% (from 52%), Nasdaq 47% (from 41%), R2000 53% (from 47%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was higher at 4.27. On 04/26 the ratio reached 5.27 which was the highest level since early January. On 02/19 the ratio fell to 2.64 which was the lowest since November 2012.
Supporting Charts:
Bonds: TLT. Closed lower on Monday but above 130.77, The 8mn poc. Needs to hold that level to remain in a strong price location.
Dollar Index: on 05/03 printed its lowest level since Jan 2015 but rallied from there and on Friday probed 94.79, the 2yr poc Resistance. Key chart – price above this level would indicate further strength.
Gold: GLD – as long as chart holds above the major poc at 118.22 it is in a strong LT price location.
Oil: USO – on Monday printed its highest level since December.
EURUSD: Support is at 1.1198, the 3yr poc and as long as EURUSD holds this level it is in a strong price location.
