Technical analysis – Market pre-open 18th May 2016
See yesterday’s highlighted comments. Both Significant Buyers and Sellers have been active over the last few days without either gaining control of the dayframe. Overlapping Value Areas have been generated. When control is finally gained by one or the other we could see a fast directional move. Most important is the poc at 2041 which has been tested once again. Price printing time below that level would put ES in a weakened price location and suggest lower. This level could be intraday Support or Resistance today. Breadth numbers deteriorated, see below.
Resistance = 2068.00 dashed line (minor 1/2R off April high)
First Level Support/Resistance = 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 Tuesday in a weak price location and printed a 25day low.
Stocks>50dyma numbers: Nyse 48% (from 57%), Nasdaq 38% (from 47%), R2000 42% (from 53%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was lower at 4.07. 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. Has today briefly probed above 94.79, the 2yr poc Resistance but currently prints back below that level. 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 Tuesday 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.
