Technical analysis – Market pre-open 28th October 2015
Two quiet days so far this week with low Volume and narrow Value Areas. Enough time has been spent at 2063.00 to migrate the five month poc to this level. Price relative to 2063.00 has now become important to monitor. It could attract more time. Significant Selling has not been marked for nine days. As long as ES holds above 2020.50 it is in a strong price location. Late last week 2070 was probed, 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 Tuesday 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 S/R = 2063.00 (5mn poc)
Second Level Support = ES 2020.50 (25dy poc)
Stocks>50dyma numbers: Nyse 60% (from 68%), Nasdaq 51% (from 57%), R2000 53% (from 61%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was higher at 5.67, a 42day 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: is today printing just 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: recently printed 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 Tuesday. Weak price location.
EURUSD: is today printing just below 1.11 (1/2R off this year’s low) in a weaker price location.
