Technical Analysis – Market pre-open 19th January 2016
See previous comments. On Friday SPY tested the Time Support at 187.20 but closed back above it. This price Supported in September and Bulls would want to see SPY hold this level. The equivalent level on ES is price area around 1870. I need to see “Effective” Buying activity marked on the ES chart before considering the long side. Having printed below 1850 on Friday ES has bounced pre-open today to probe above 1900.
Key Charts: DIA closed below its major poc (now 63.75) on Friday. Bulls would want to see DIA recover back above this level as soon as possible. SPY has Support at the 187.20 poc, price printing time below that level would indicate more weakness.
Resistance = ES 1965.25 (1/R off last year’s high)
Support = ES 1870 (previous poc)
Market Charts: All major Market Charts remained negative.
Stocks>50dyma numbers: Nyse 9%, 9%, R2000 8%, UK 14%. Numbers >50 are supportive.
Sentiment: On 12/29 my version of the Rydex Assets Ratio reached 9.17. A few days later I mentioned that the S&P was down more than 4% but the ratio had only fallen by 11.5% which looked like complacency from the Rydex traders, not usually bullish in the ST. On Friday the Ratio was at 4.63, down nearly 50%, so some fear has now been registered in this indicator.
Supporting Charts:
Bonds IEF, the 7-10 yr ETF: Held the major Support at 105.00 following October’s decline and rallied. Now printing time above 106.60 (18mn poc) in a stronger price location. There is Support now at 107.17 which is the 1/2R off last year’s high.
Dollar Index: A probe in early December above the March high was rejected. The minor 1/2R off that high is at 98.85 and the index is printing just above that level today.
Gold GLD: printed a 44day high earlier in the month as investors sought safe haven. Chart is still in a LT weak price location though.
Oil: lower again this week, reaching its lowest level since 2003.
EURUSD: The rally from the November low approached, but did not test, the First Level Resistance at 1.1080, 1/2R off March low. Chart has been consolidating since early December and I am watching to see if the current 12mn poc will migrate lower.
