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Today's Technical Outlook - 12/03/2012

Market Summary

David Chojnacki S1F Market Technician

Very little movement on Friday, as the indices continued to consolidate the prior week's strong reversal to the upside. The major averages are trading right near key technical levels and it is easy to be whipsawed in this type of market. At the close on Friday, the DJIA added 3.7 points, the S&P tacked on just 0.23 points, and the Nasdaq100 gave up 2.1 points. Breadth was to the upside, 1.2 to 1, on above average volume. For the week, the DJIA and S&P had slight gains of 0.1 and 0.4% respectively, with the Nasdaq100 the strongest, gaining 1.4%. In the recent pullback, the Nasdaq100 slid back 11.8%, so it is no wonder that in the current reversal it has been the strongest index with an RSI(10) of 56.5. Just as we began to get signals of a longer term breakdown, the averages quickly reversed. We are now back above these levels, but within striking distance of testing these levels in the near term. Trying to trade this short term may just leave you getting whipsawed around some key technical levels. It's obvious that daily headlines from Washington are moving this Market, sometimes on a minute by minute basis. It appears that this is going to continue for this week, with little agreement noted on the self-imposed fiscal-cliff. We have employment numbers on Friday of this week, which may impact the Market.

Trading Trends

David Chojnacki S1F Market Technician

Long term, after falling below key long term levels, the averages have now made their way back to positive bias. We continue to hold above these levels, but are within striking distance on any weakness. Short term the bias has reversed, but remains questionable as we are trading near key technical levels. While the action has been positive we would like to see a stronger confirmation that the short term reversal is real. A move above 2700 in the Nasdaq100 and 1425 in the S&P would make the move more believable. Near term, it's a whip-saw market, with averages trading on either side of technical signals. The VIX continues at low levels, which agrees with the prior week's reversal. Futures are up this morning versus fair value.

MAJOR INDICESShort term support and resistance level
DJIA

close 13025

SP500

close 1416

N100

close 2678

13000 13028 1412 1420 2675 2688
12995 13125 1409 1422 2669 2694
12985 13198 1400 1425 2664 2700
12880 13300 1396 1437 2661 2709
12851 13400 1393 1450 2653 2712
12810   1385 1462 2650 2725
12724   1375 1475 2625 2734
12674   1371 1488 2613 2750
    1362   2612  
Click to enlarge

Major Economic Reports Today

ISM Index-10:00am Construction Spending-10:00am Auto/Truck Sales-2:00pm

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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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