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Today's Technical Outlook - 4/7/2014

Market Summary

David Chojnacki, Market Technician

A mediocre Employment Report set the stage for a decent open on Friday, pushing the DJIA and S&P to new intra-day highs in the first hour. The Nasdaq100 did not share the upside bias, and momentum stocks continued their moves to the downside. By late morning this weakness penetrated the other major indices and a broad decline ensued. The selling accelerated throughout the session and the indices ended the day with significant losses. At the close on Friday, the DJIA lost 0.96%, the S&P gave up 1.2%, and the Nasdaq100 tumbled 2.7%. Breadth was decidedly negative, 2 to 1, on above average volume. RSI's moved down, with the Nasdaq100 moving into the upper 30's. ROC(10's) declined in the session. The Nasdaq100 is the only index with a MACD below signal. For the week, the DJIA added 0.5%, the S&P was up 0.4%, and the Nasdaq100 losing 0.8%. The S&P is now the only major index up on the year. The VIX remains relatively tame(13.96), despite the carnage in the Nasdaq100.

Trading Trends

 

MAJOR INDICES Short term support and resistance level

DJIA

close 16412

SP500

close 1865

N100

close 3539

16400

16500

1862

1865

3537

3549

16338

16576

1850

1875

3525

3550

16250

16600

1840

1888

3512

3562

16134

16625

1838

1900

3500

3575

16000

16631

1837

1912

3488

3583

15900

16700

1825

1925

3475

3588

15868

 

1812

1937

3462

3600

15800

 

1809

 

3450

3612

15710

 

1800

 

3437

3623

Click to enlarge

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TODAY'S DATE, UNLESS OTHERWISE INDICATED

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Major Economic Reports Today

Consumer Credit-3:00pm

Long term trend continues with an upside bias, as the averages maintain positive long term technicals. The Nasdaq100, however, dropped below a 1 year trend line(3570) last week and is showing some weakness after making a top on March 6. The DJIA and S&P hit new highs last week, before taking a big loss on Friday. Short term technicals are weakening for the Nasdaq100, however, still positive for the DJIA and S&P. Near term, we may see a continuation of Friday's weakness as volume picked up in the selling. Watch 1860 for S&P near term support, may be heading to test 1809. The Nikkei was off 1.6% over-night and Europe is displaying early weakness. Pro-Russian demonstrators taking over state buildings in east Ukraine. Futures are pointing lower this morning versus fair value.