Technical analysis – Market pre-open 7th April 2016
In Wednesday’s session an early probe below 2041.00 (minor poc) was rejected and ES rallied to a strong close, see previous highlighted comments. Aggressive Buying (green-at-top) was marked which is usually an ST sign of strength but if Wednesday’s session low (2035) is broken it would negate any ST positive implications of that green-at-top high. Pre-open ES prints 2050. See Sentiment, below.
Minor Support/Resistance = 2041.00 (minor poc)
First Level Support = 1990 (38day poc)
Second Level Support = 1956.90 (1/2R off last year’s high)
Major Support (major) = ES 1870 (previous maj poc)
Key Charts: DAX remains below 9740, the major poc, having broken below that level on Monday.
Stocks>50dyma numbers: Nyse 83% (from 82%), Nasdaq 75% (from 72%), R2000 76% (from 74%). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was higher at 5.11. Although this is much lower than levels reached last year, this is a 57day high. On 02/19 the ratio fell to 2.64 which was the lowest since November 2012.
Supporting Charts:
Bonds: TLT – has held the Support at 126.70 (1/2R level), and is printing above 128.43, the 3mn poc, in a strong price location.
Dollar Index: printing below the 97.40 poc in a weak price location.
Gold: GLD major poc is now 118.05. On Friday found Support at the previous poc at 115.50. Price below this level would suggest further weakness.
Oil: USO Sold off sharply at the end of last week and on Tuesday reached the Support at 9.00, the 6mn poc. Strong rally on Wednesday.
EURUSD: found Support recently at 1.1085, the 1/2R off last year’s low and has rallied from there. Earlier today printed its highest level since October.
