Technical analysis – Market pre-open 2nd March 2106
Tuesday was a constructive day. Aggressive Buying (green-at-top) was marked above 1956.90, the 1/2R off last year’s high, see yesterday’s comments. This is now First Level Support. Breadth numbers improved, see below.
First Level Support = 1956.90 (1/2R off last year’s high)
Second Level Support = ES 1886.50 (70 day poc)
Major Support (major) = ES 1870 (previous maj poc)
Key Charts/Levels: DIA closed above 164.25, its maj poc and above 166.96, the 1/2R off last year’s high, in a strong price location. Price printing time above this level would be a further positive.
Stocks>50dyma numbers: Nyse 69% (from 59%), Nasdaq 55% (from 46%), R2000 61% (from 50%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio indicates the first sign oif “fear of missing out”. The ratio was hiugher at 4.24 which is a 17day high. The rydex traders have been very slow to get on this rally. This is a contrarian indicator. The ratio recently fell to 2.64 which was the lowest since November 2012.
Supporting Charts:
Bonds IEF, the 7-10 yr ETF: Held the major Support at 105.00 following October’s decline and rallied strongly. On 02/11 the chart spiked to a new high – is off that level and today futures have printed a sixteen day low.
Dollar Index: LT – on 02/11 found Support at 95.22, the 12mn poc. Higher from there and Bulls would want to see that level hold. ST – Currently the chart is printing above 97.87, the 1/2R off this years high, in a stronger price location.
Gold: GLD has rallied strongly and is printing above 115.12, the 24mn poc, which is now Support.
Oil: is printing above the minor 1/2R off the January low. Bulls (and equity Bulls) would want to see that level hold.
EURUSD: earlier in the month probed above 1.1241, the Major 1/2R, but is off that level and is now printing below 1.1085, the 1/2R off last year’s low and is today printing below 1.0925, the 12mn poc in a weak price location. Time below this level would suggest a retest of last year’s low.
