Market Summary
David Chojnacki, Market Technician
The Market started last week to the downside, tried to make a come-back midweek, but then fell sharply on Thursday and Friday. The major indices fell steadily on Friday and closed with significant losses and just off their lows of the day. A combination of earnings anticipation and Geo-political concerns weighed on equities. At the close on Friday, the DJIA lost 0.89%, the S&P slipped 0.95%, and the Nasdaq100 gave up 1.1%. Breadth was decidedly negative, 2.4 to 1, on above heavy volume. RSI's dropped significantly last week, with the S&P and Nasdaq100 now in the 30's. ROC(10's) declined in the session, with all major indices in negative territory. For the week, the DJIA gave up 2.3%, the S&P and Nasdaq100 lost 2.6%. The Nasdaq100, which has been hit harder because of momentum stocks, is now down 7.5% from its early March closing high of 3727. We finally saw the weakness and volatility begin to show up in the VIX index. The VIX fell 7.1% on Frday and finished the week at 17.03.
Trading Trends
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Long term trend continues with an upside bias, however, the Nasdaq100 is beginning to see its long term technicals attacked. Last week the Nasdaq100 closed below its 150D-SMA of 3474. We had noted the signs of a top developing several weeks ago, with double tops and choppiness. Short term technicals weakened considerably last week and bias is now to the downside. The S&P has traded right at Fibonacci levels the last few sessions and we expect it to test the 1798 level. Near term, we may see equities try to absorb last week's losses and consolidate, but we expect more downside. Over-seas markets are slightly lower in early trade. Earnings pick-up this holiday shortened week. Futures are mixed this morning versus fair value.
MAJOR INDICES Short term support and resistance level | |||||
DJIA close 16026 | SP500 close 1815 | N100 close 3539 | |||
16000 | 16172 | 1862 | 1825 | 3537 | 3549 |
15912 | 16250 | 1850 | 1833 | 3525 | 3550 |
15900 | 16331 | 1840 | 1840 | 3512 | 3562 |
15800 | 16400 | 1838 | 1850 | 3500 | 3575 |
15746 | 16500 | 1837 | 1862 | 3488 | 3583 |
15700 | 16625 | 1825 | 1875 | 3475 | 3588 |
15600 | 1812 | 1888 | 3462 | 3600 | |
1809 | 1890 | 3450 | 3612 | ||
1800 | 1897 | 3437 | 3623 |
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