Technical analysis – Market pre-open 17th September
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.
