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Today's Technical Outlook - 3/24/2014

Market Summary

David Chojnacki, Market Technician

With no major economic news to move the Market, investors continued to add to equities at the open on an easing of Geo-political concerns. It was also options expiration on Friday, which contributed to some volatility in the session and a sell-off which began after the S&P hit a new intra-day high of 1883. By the final bell, the major indices were in negative territory. At the close on Friday, the DJIA was down 28 points, the S&P slipped 5.4 points, and the Nasdaq100 off 1.1%. Breadth was positive, 1.4 to 1, on above average volume, mostly due to options expiration. RSI's remain bullish, but the Nasdaq100 dropped below 50. ROC(10's) were mixed in the session and remain in negative territory. For the week, the DJIA added 1.4%, the S&P up 1.3%, and the Nasdaq100 tacked on 0.7%. The Nasdaq100 finished the week as the weakest, as some of the momentum stocks were selling off. MACD's remain below signal. The VIX added 3.3% on Friday, but remains at the relative tame level of 14.62.

Trading Trends

 

MAJOR INDICES Short term support and resistance level

DJIA

close 16302

SP500

close 1866

N100

close 3653

16285

16400

1862

1875

3650

3662

16250

16500

1861

1878

3637

3675

16130

16576

1860

1888

3625

3688

16000

16600

1850

1900

3619

3700

15900

16625

1840

1912

3612

3712

15800

 

1837

1925

3600

3725

15770

 

1832

1937

3588

3727

15647

 

1825

 

3575

3737

   

1812

 

3562

 
Click to enlarge

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Major Economic Reports Today

No reports scheduled

Long term technicals continue with an upside bias, as the averages continued to move higher last week. The S&P even hit a new intra-day high on Friday. Short term technicals strengthened last week as the averages moved away from key near term support. We continue to watch key Fibonacci levels of 1825 in the S&P and 3617 for the Nasdaq100 as indication that short term strength is weakening. Near term, we had some volatility last week, with key support at 1860 for the S&P and 3677 for the Nasdaq100. Geo-political issues will remain on investors' minds next week, as Russian troops remain on Ukraine's border and have already annexed Crimea. Some key economic numbers this week, including GDP. Futures are pointing higher this morning versus fair value.