Technical analysis – Market pre-open 6th October
Following the Aggressive Buying on Friday, ES gapped higher to open Monday’s session. The 1/2R Resistance at 1971.00, was probed and Aggressive Buying was marked again. These green-at-top highs are tested within a day (or two) 80% of the time but this stat is less reliable when marked on a gap higher day. Overnight 1971.00 has attracted time and ninety minutes pre-open that is where it is printing. This level could be intraday Support or Resistance today but price printing time above this 1/2R wouyld put the chart in a strong price location. Breadth numbers are improving (but not yet above 50) and Sentiment is interesting, see below.
potential S/R today = ES 1971.00 (1/2R off this year’s high)
First Level Support = ES 1923.00 (50dy poc)
Second Level Support = ES 1865.00 (poc)
ETFs: Momentum (PriceOsc) for all four major stock index ETFs is still negative but has turned up.
Important ETF S/R Levels: SPY 198.09 = 1/2R off May high; IWM 111.50 = poc; QQQ 105.10 = maj poc; DIA 166.96 = 1/2R off May high.
Stocks>50dyma numbers: Nyse 44% (from 27%), Nasdaq 38% (from 27%), R2000 42% (from 27%). Numbers >50 are supportive.
CP Market Charts: All major Market Charts remained negative.
Sentiment: My version of the Rydex Assets Ratio was lower at 3.09 which is the lowest ratio since September 2013, a two year low.
Supporting Charts:
Bonds TLT: is in a strong price location if it can hold above 121.40 (12mn poc). There is resistance at 126.70, the 1/2R off this year’s high.
Dollar Index: recently found Support at 94.67, the 12mn poc. Rallied back to the Resistance at 96.50 (1/2R off this year’s high) without overcoming it and is still printing below that level.
Gold GLD: rallied strongly on Friday above 107.78, the 1/2R off July low. This is strong ST price location if it holds.
Oil USO: is currently finding Support at the 1/2R off August low. Price below this level would be weak location.
EURUSD: weak LT price location printing below 1.1340 (12mn poc). But in the ST, the chart is currently being Supported by the 1/2R off March low at 1.1083. Price below this level would suggest further weakness.
