Technical analysis – Market pre-open 23rd October 2015
See yesterday’s highlighted comments. We had four days of overlapping Value Areas where Sellers were offered opportunity. Buyers, encouraged by the lack of response from the Sellers re-emerged on Thursday. ES opened just above First Level Support and immediately auctioned higher, breaking out to a new high for this move. Aggressive Buying (green-at-top) was marked and a higher, relatively wide, Value Area was generated. The current distribution suggests development higher but it may become stretched above 2070.
The disparity between the performance of Large Caps and Small Caps is striking as we are still looking for confirmation from Key Chart IWM overcoming its Resistance, see below.
First Level Support = ES 2020.50 (22dy poc)
Second Level Support = ES 1971.00 (1/2R off this year’s high)
Key Resistance: IWM 115.35 = maj poc; FTSE100 6445.50 = 1/2R off April high.
Stocks>50dyma numbers: Nyse 68% (from 60%), Nasdaq 55% (from 49%), R2000 61% (from 54%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was higher at 5.38 which is a 38 day 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) and needs to hold this level to remain in a strong price location.
Dollar Index: has rallied back to the Resistance at 96.50 (1/2R off this year’s high) where rallies has failed twice since the August low. Price above this level would be stronmger 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: has this week broken below 1.1340 (12mn poc) and has today printed down to the Support at 1.11 (1/2R off this year’s low).
