On Monday the minor poc migrated to 1954.00 and subsequently provided Support on Tuesday with Aggressive Buying being marked.. That’s positive price action. On Wednesday ES found Support at 1978.50, the 1/2R off this year’s high, with Aggressive Buying being marked again. 1978.50 is now Major Support and ES needs
to hold that level to maintain a strong price location. Price action leading into today’s major risk event looks like a positive outcome is being anticipated by futures traders.
There will likley be volatility today but we have clear levels which will be a guide to market strength/weakness when the dust has settled.
First Level Support = 1978.50 (1/2R off this year’s high)
Second Level Support = 1954.00 (33dy poc|)
ETFs: Note the following important levels = SPY 198.10; IWM 116.00; DIA 166.95. Price above these levels would be much stronger location. All three charts closed above these levels on Wednesday.
Breadth numbers are not yet supportive.
Stocks>50dyma numbers: Nyse 30% (from 22%), Nasdaq 37% (from 33%), R2000 36% (from 30%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio is at 3.79. Friday’s ratio at 3.68 was the lowest level since October 2013. This is a contrarian indicator.
Supporting Charts:
Bonds TLT: found Resistance on 08/24 at 126.69 (1/2R off this year’s high) and sold off. Momentum (PriceOsc) is negative and down. Closed weak on Wednesday. There is Support at 117.15, the major poc.
Dollar Index: currently printing very close to 94.67, the 12mn poc. Price below this level would be weak price location. There is Resistance at 96.50 (1/2R off this year’s high) but price above that level would be stronger location.
Gold GLD: chart rallied into mid August but has retraced from there. Price is now printing below 107.78, the 1/2R off July low, which is weak price location. Momentum is negative.
Oil USO: printed a new low on 08/24 and then rallied very strongly from there to its highest level since late July. This week has found Support at the minor 1/2R off August low. Momentum is positive and up.
EURUSD: currently printing very close to 1.1340 (12mn poc) which is now Resistance. The minor 1/2R off March low at 1.1083 provided Support recently but price below that level would suggest further weakness.
