Technical analysis – Market pre-open 19th October
Friday’s session generated the eigth Value Area above 1971.00, the 1/2R off this year’s high and ES must hold this Support to remain in a strong price location. Aggressive Buying (green-at-top) was marked for the second time in the week. Sellers were Active on Tuesday and Wednesday but Ineffective on the weekly timeframe as ES closed strong for the week and above the high of the Mon-Wed range. The minor (18day) poc is at 2006.50 This could be Support or Resistance at the start of this week and may provide a clue re ST strength/weakness. A further general positive would be Key Chart IWM (Small Caps) overcoming its proven Resistance, see below.
First Level Support = ES 1971.00 (1/2R off this year’s high)
Second Level Support = ES 1923.00 (50dy poc)
Key Support this week: SPY 198.10 = 1/2R off May high; QQQ 105.10 = maj poc; DIA 166.95 = 1/2R off May high.
and Key Resistance: IWM 116.00 = maj poc; FTSE100 6445.50 = 1/2R off April high.
Market Charts: Nyse styed positive; Nasdaq and R2000 stayed neutral and UK turned back to negative.
Stocks>50dyma numbers: Nyse 65%, Nasdaq 53%, R2000 59%, UK 48%. Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio ended the week at 4.24 with Thursday’s ratio at 4.90 being a 30day high. However, on 10/05 the ratio recorded 3.09 which was a two year low.
Supporting Charts:
Bonds TLT: has been consolidating for three weeks above the 121.40 Support (12mn poc). Needs to hold this level to remain in a strong price location.
Dollar Index: in September rallied back to the Resistance at 96.50 (1/2R off this year’s high) without overcoming it. Fell from there and is currently printing below 94.67, the 12mn poc, in a weak price location.
Gold GLD: broke above the August high last week to print its highest level since June.
Oil USO: recently found Support at the 1/2R off August low rallied from there to test the August high. This was rejected and USO fell sharply from there. The 1/2R Support off the August low is now at 14.28. Futures indicate a lower open today.
EURUSD: is today printing very close to 1.1340 (12mn poc) and must hold this level to maintain a strong price location.
