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Today's Technical Outlook - 4/14/2014

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

Click to enlarge

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