Technical analysis – Market pre-open 18th February 2016
See previous comments. ES rallied further on Wednesday generating a second Value Area above the 1870 poc which is now important Support. Bulls would now want that level to hold. Price momentum (PriceOsc) and breadth have improved. Also, see sentiment below.
First Level Support (minor) = ES 1886.50 (56 day poc)
Second Level Support (major) = ES 1870 (previous maj poc)
Stocks>50dyma numbers at end of last week: Nyse 43% (from 34%), Nasdaq 31% (from 24%), R2000 33% (from 27%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio fell on Wednesday to 2.94 which is the lowest since July 2013. The rydex traders have taken the rally as an opportunity to sell. That’s encouraging. 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 rallied strongly. On Thursday last week the chart spiked to a new high but fhas declined from there.
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: GLD has rallied strongly and now prints above 115.12, the 24mn poc, which is now Support.
Oil: is printing back above the 1/2R off the January low. Bulls would want to see this level hold.
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.
