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Today's Technical Outlook 9/10/2012

Market Summary

David Chojnacki S1F Market Technician

After trading through the month of August in a very narrow range on weak volume, the Market broke out of its doldrums and moved to new highs. The offer to buy short term bonds gave investors hope that the ECB could put a floor under European nations facing a fiscal crisis. There is not a guarantee, however, that the countries will accept all the conditions to participate in the program. Continuing weak economic and jobs reports, leave the door open for the Fed to take further monetary easing. While both of these actions do not guarantee improvement in U.S. and world economies, investors are chasing equities to improve their performance against the benchmark S&P. The S&P YTD is up 15%. The averages on Friday were little changed and mixed, but held on to the strong gains of Thursday's big move. Breadth was positive, 2 to 1, and volume was above average. For the week, the DJIA was up 1.6%, the S&P gained 2.2% and the Nasdaq100 added 1.9%. Near term technicals remains strong as RSI's are in the 60's with the Nasdaq100 and S&P approaching 70. While MACD's remain below signal for the DJIA and Nasdaq100, we did see it cross back above for the S&P. The DJIA which had traded below its 20D-SMA has moved back above. Short term target for the S&P is now 1504 and 3000 for the Nasdaq100.

Trading Trends

David Chojnacki S1F Market Technician

Long term, the bias remains to the upside, as we moved to new breakout highs. The only negative we see in the short term is MACD's are teetering below or near signal. Other short term technicals remain strong and keep the bias to the upside. We will watch 1425 to provide support on the downside for the S&P. For the Nasdaq100 we have 2784 providing support. Near term technicals improved dramatically on Thursday's big day. We would expect a bit of consolidation after last week's move to new high levels. The FED will be meeting this week and everyone is expecting some type of easing program. This week is also full of economic reports providing a window into the economy. Futures this morning are lower versus fair value.

MAJOR INDICESShort term support and resistance level
DJIA

close 13306

SP500

close 1437

N100

close 2825

13279 13338 1425 1437 2812 2825
13160 13400 1419 1440 2800 2837
13125 12500 1412 1450 2795 2850
13000 13625 1411 1462 2784 2862
12987 13700 1400 1475 2775 2875
12900   1394 1488 2771 3000
12810   1388 1500 2750 3025
    1384 1504 2725  
           
Click to enlarge

Major Economic Reports Today

Consumer Credit-3:00pm

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