David Chojnacki S1F Market Technician
The Market began the day following through on the prior session's moderate gains. The focus once again was on the fiscal cliff negotiations and Washington comments were driving the trade. Several up and down moves reacting to the headlines had the Market trading in a narrow, but volatile range. At the close, the DJIA was up 36.7 points, the S&P added 6 points, and the Nasdaq100 tacked on 14.7 points. Breadth was positive, 2.6 to 1, on below average volume. RSI's are now firmly in the 50's, with the Nasdaq100 the strongest, at 57. ROC(10's) are positive and once again moved to the upside. MACD's continue above signal for all three major indices. The trade was again between technical ranges. The DJIA moved above its 200D-SMA(12994) and closed above the 13000 level. The Nasdaq100 closed above some key levels , including its 200D-SMA(2668). The S&P traded between technical levels, and was able to close just above its one year trend-line(1411). The bias near term is favoring the upside, however, the indices are beginning to come into more formidable resistance areas. The Nasdaq100 formed a 'doji' in yesterday's session and is trading in a congestion area which exists between 2640 and 2700. It will also find resistance at its 50D-SMA( 2704). Look for support at 2675 and 2661-67 area. The S&P closed just above its 52 week trend-line(1411), and now that should provide some near term support along with 1400 and 1393. Upside resistance is fairly formidable near the 1420-25 area. The VIX closed down 2.5% to finish at 15.51. We are right near technical levels that small moves can swing bias in either direction. With headlines influencing the daily trade, this scenario can lead to whipsaw. Look at individual situations until the macro environment shakes out. Futures are up versus fair value.
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