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Today's Technical Outlook 9/17/2012

Market Summary

David Chojnacki S1F Market Technician

 

Empire Manufacturing-8:30am
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MAJOR INDICESShort term support and resistance level
DJIA

close 13593

SP500

close 1465

N100

close 2855

13525 13625 1462 1475 2850 2862
13400 13700 1450 1488 2837 2875
13338 13800 1440 1500 2825 2882
13279 13930 1437 1504 2812 2888
13214 14198 1425 1512 2800 2900
13125   1421 1525 2795 2912
    1411 1537 2789 2925
    1400 1549 2775 2937
        2750 2950
Click to enlarge

Long term, the bias remains to the upside, as once again we moved to new breakout highs. Any short term technical weakness seems to have been cleansed out of the Market for now and we see a green light for new highs. Over the near term, the indices are becoming a bit frothy and near over-bought conditions. We can see a little consolidation action this week as investors reposition. While some investors are in a 'catch-up' mode, the averages have had a nice gain for the year and from the June low. It's a quiet week for economic news, but there is plenty 'event risk' related world-wide news to keep investors on their toes. Futures this morning are lower versus fair value.

Major Economic Reports Today

The Market began the week digesting the prior week's strong move and waiting for word from the FED on new easing plans. When the FED announced their 40 billion/month MBS buying plan and the open ended easing policy, investors sold bonds and looked to equity for future gains. On Friday the buying continued, but some profit taking near the close, left the indices off their highs of the day. At the close on Friday, the major indices were up between 0.4% and 0.8%. Breadth was positive, 3 to 1, on above average volume for the second session in a row. For the week, the DJIA was up 2.1%, the S&P gained 1.9%, and the Nasdaq100 added 1%. The DJIA and S&P pushed to new 5 year highs, and the Nasdaq100 moved to levels not seen since 2000. The end of the week big move left near term technicals strong, and may be becoming slightly over-bought. The MACD for the Nasdaq100 moved back above its signal, eliminating any short term technical weakness signals. We would expect to see some further repositioning and asset allocation this week as investors modify strategy to the extended FED policy. With equities approaching over-bought levels, we also expect to see a little consolidation during the week. Short term target for the S&P is now 1504 and 3000 for the Nasdaq100.

Trading Trends

David Chojnacki S1F Market Technician