Technical analysis – Market pre-open 21st October 2015
Buyers have been active over the last four days. This week has generated overlapping Value Areas with price printing enough time at 2020.50 to lift the minor poc to this level which is now First Level Support. In fact, overnight that has been the exact low following an overnight high above 2030. First sign of weakness in the ST is price printing time below that level. And as long as ES holds above 1971.00, the 1/2R off this year’s high it is in a strong price location in the longer timeframe.
We are still looking for the further positive of Key Chart IWM (Small Caps) overcoming its proven Resistance, see below.
First Level Support = ES 2020.50 (20dy 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 67% (from 64%), Nasdaq 55% (unch), R2000 62% (from 60%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was slightly higher at 4.66. 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) and 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. Resistance at 115.12, the 12mn poc.
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.
