Technical Analysis – Market pre-open 1st February 2016
See Friday’s highlighted comments. The ST analysis improved last week. ES held minor poc at 1886.50 on Friday and we saw a strong end to the week. Friday closed above Mon-Wed Hi-Lo range and the weekly bar was higher which gives the first positive weekly structure since October and Aggressive Buying was marked on Friday for the first time since December. Other ST positives include the fact that SPY found its higher low Support at the 187.20 poc and that Momentum for all four major stock ETFs, although negative, is up. Still looking for improvement in Breadth numbers, Market charts and Momentum. DIA is a key chart, see below.
First Level Support = 1886.50 (min poc)
Second Level Support = ES 1870 (previous maj poc)
Key Chart: DIA closed above its major poc at 63.75. Next positive would be time printed above this level. DIA will likely open this week below this price.
Market Charts: All major Markets Charts remain negative.
Stocks>50dyma numbers: Nyse 28%, Nasdaq 24%, R2000 24%, UK 28%. Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio ended the week at 3.97. On 12/29 the ratio reached 9.17. On 01/21 it fell to 3.52 which is as low as it has been for two years except for the sell-off late last year when the ratio fell to 3.00.
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 well above 106.60 (18mn poc) in a stronger price location and closed last week at its highest level since February last year.
Dollar Index: A probe in early December above the March high was rejected but if the chart can now hold the minor 1/2R (98.85) off that high I will look for a break higher.
Gold: chart printed a 61day high last week but is still in a LT weak price location.
Oil: rallied strongly off the low in January but is lower today.
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 in a range since early December and is today printing below 1.0925, the 12mn poc, in a weak price location.
