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Today's Technical Outlook - 5/9/2014

Market Summary

David Chojnacki - Market Technician

Claims numbers were better this week than last, but still were not stellar. The Market opened slightly to the downside, but quickly turned up and carried that momentum into the PM hours. Shortly before 1PM, the major indices reversed to the downside and carried that weakness into the final bell. The DJIA closed the day in positive territory, while the other two major averages closed slightly lower. At the close, the DJIA gained 32 points, the S&P dropped 2.5 points, and the Nasdaq100 slipped 6 points. Breadth was negative, 2.1, on below average volume. RSI's were mixed, with the Nasdaq100 holding in the 40's and the DJIA and S&P remaining in the 50's. ROC(10)'s advanced in the session, with the Nasdaq100 and S&P moving back into positive territory. The DJIA traded above its previous closing high of 16580, but fell short of testing its intra-day high of 16631. The weakness in the afternoon left the average 30 points below the earlier closing high. It did, however, have its MACD cross back above signal. The Nasdaq100 got within 3 points of its 50% retracement level of 3586, and then closed below its 20D-SMA of 3546. The S&P traded in a technical range(1870-1889), much like the Nasdaq100 and closed right at 1875. The S&P and DJIA have approached recent highs several times and continue to fail to move to new highs. This is a worrisome sign and may foretell a larger pullback. The VIX added 0.03 to finish at 13.43. Near term support for the S&P is now at 1875-70 and 1862-61. Near term upside resistance for the S&P is now at 1888-90 and 1897-1900. The Nasdaq100 near term support is now at 3543-40 and 3537 and 3725. Near term upside resistance is now at 3550-53 and 3562. The Nikkei was up slightly over-night and Europe is lower in early trading. Futures are slightly lower before the open.

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