Technical analysis – Market pre-open 27th October 2015
Please read previous highlighted comments. A very quiet day on Monday with low Volume and a narrow “inside” Value Area generated ahead of the Fed meeting. As long as ES holds above 2020.50 it is in a strong price location. Last week 2070 was probed on Friday, a level where I suspected the current distribution might become stretched. Acceptance of price around 2070 would be a further positive.
The disparity between the performance of Large Caps and Small Caps is striking. IWM closed on Monday just below 115.35, its key level. A further positive for the general market would be to see IWM print time above that price. And UK FTSE100 above 6445.50.
First Level Support = ES 2020.50 (23dy poc)
Second Level Support = ES 1971.00 (1/2R off this year’s high)
Stocks>50dyma numbers: Nyse 68% (from 71%), Nasdaq 57% (from 59%), R2000 61% (from 64%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was higher at 5.50, a 40day 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. Futures indicate a higher open today.
Dollar Index: is today printing above 96.50 (1/2R off this year’s high). Price needs to hold this level to remain in a strong 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: The 1/2R Support off the August low is now at 14.28 and USO closed below that level on Monday with futures indicating a lower open today. Weak price location.
EURUSD: is today printing below 1.11 (1/2R off this year’s low) in a weaker price location.
