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Today's Technical Outlook -3/4/2013

Market Summary

David Chojnacki S1F Market Technician

Some early weakness quickly reversed and the Market moved to the upside for the remainder of the session. It was a slow and methodical move as the major indices closed near their highs of the session. Gains were minimal. At the close on Friday, the DJIA was up 35 points, the S&P added just 3.5 points, and the Nasdaq100 increased 9 points. Breadth was just slightly positive, 1.2 to 1, on below volume. For the week, the DJIA added 0.6%, the S&P up just 3 points, and the Nasdaq100 gained 0.3%. It was very choppy weak, but in the end the averages changed very little. The VIX, the volatility index, was extremely volatile on the week. The DJIA closed at a new five year high, but was not joined by the other major indices. We still have MACD's below signal for the three major indices and upward momentum as indicated by the ADX, has waned for the DJIA and S&P. RSI's remain in bullish territory as we continue this slow move to test all-time highs in the DJIA and S&P. There are concerns at these levels with headwinds for the S&P in the 1525-1540 area. Some of the choppiness we are seeing is also indicative of a developing top. We also are not seeing the Nasdaq100 confirming the strength in the other indices. Equities seem to be the favored place for cash, but mixed economic signals are keeping flow tepid.

Trading Trends

David Chojnacki S1F Market Technician

The end of this week marks the 4 year bull market since the 2007-2009 50% loss. The Nasdaq100 had moved above its 2007 levels in Oct.2011, made a new high in Sept.2012, but has since been unable to challenge that high. Long term technical indicators continue to favor an upward bias. Short term, a few cautionary signals are beginning to rear their heads, but no indication of a breakdown. Near term, we continue to watch some key levels for directional bias. 1512 and 2725 are key for the S&P and Nasdaq100 respectively. This week's economic calendar is highlighted by the Employment report and the FED's Beige Book.

MAJOR INDICESShort term support and resistance level
DJIA

close 14089

SP500

close 1518

N100

close 2747

14000 14125 1512 1525 2734 2748
13973 14198 1500 1530 2730 2750
13930 14250 1494 1540 2728 2762
13800 14300 1488 1550 2725 2775
13725 14375 1484 1562 2718 2788
13700 14500 1475 1576 2712 2800
13677   1462 1588 2709 2812
13656   1460 1600 2700 2825
    1450      
Click to enlarge

Major Economic Reports Today

No reports scheduled

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