Technical analysis – Market pre-open 20th October
Monday’s session generated the ninth 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.
Buyers Reacted to an open below Friday’s Value Area and immediatley auctioned ES higher. If price should print 2014.25 today it would negate any ST positive implication of that green-at-bottom low. A higher/overlapping Value Area was generated. The minor (19day) poc is at 2006.50 and this is First Level Support. A further positive would be Key Chart IWM (Small Caps) overcoming its proven Resistance, see below.
First Level Support = ES 2006.50 (min poc)
Second Level Support = ES 1971.00 (1/2R off this year’s high)
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.
Stocks>50dyma numbers: Nyse 64% (from 65%), Nasdaq 55% (from 53%), R2000 60% (from 59%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was slightly higher at 4.45 (from 4.24). Last week the ratio reched a 30day high at 4.90. 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. Futures indicate a lower open today.
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.
EURUSD: is today printing very close to 1.1340 (12mn poc) and must hold this level to maintain a strong price location.
