David Chojnacki S1F Market Technician
We continue in a trading range, as investors wait for details from the ECB on the new bond buying program. Yesterday's trading was flat from the open to the close and we ended with a mixed finish. At the close, the DJIA added 11.5 points, the S&P gave up 1.5 points and the Nasdaq100 gave up 5 points. Breadth was just slightly negative on weak volume. RSI's weakened somewhat, displaying the slowdown in momentum to the upside. ROC(10's) remained negative, and declined in the session. Not much else had changed with technicals in the session. Technicals continue to remain positive, but some near term weakness has begun to develop. The S&P held the 1400 level in the session, but ran into resistance at its 20D-SMA(1408). The S&P did develop a 'Doji' in the session, so once again we look for a possible reversal. Near term, we continue with 1395 as support and 1411 as upside resistance. We continue to have the spring highs as the target, but no catalyst has developed to push us through. The Nasdaq100 continues to find support near its 20D-SMA(2759) and is the only major index holding above that level. The Nasdaq100 also developed a 'Doji' in yesterday's session, and its RSI fell below 60. We still see the near term range in the Nasdaq100 of 2750 on the downside and 2784 at the top. We did manage to trade intra-day on Aug.21 at the 2802 level, but since have pulled back and remained below. The VIX was off slightly to close at 17.74, as volatility remains in check. Initial Claims, ECB news, and tomorrow's Job's report should provide the catalyst to remove us from this thin trading range. Futures are significantly higher before the open this morning, as investors anticipate a solution from the ECB to lower the European risk.
Major Economic Reports Today
ADP Employment Change-8:15am Initial/Continuing Claims-8:30am ISM Services-10:00am Crude Inventories-11:00am
ALL PRICES NOTED IN THIS PUBLICATION ARE AS OF THE CLOSE ON TRADING PRIOR TO TODAY'S DATE, UNLESS OTHERWISE INDICATED
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