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Today's Technical Outlook- 5/12/2014

Market Summary

David Chojnacki, Market Technician

The Market got off to a weak start on Friday, with no news to move equities to the upside. By late morning buyers were taking advantage of the lower prices and buying the dip. The averages closed near their highs of the session and finished with small gains. The DJIA managed to close at a new high. At the close on Friday, the DJIA gained 32.3 points, the S&P eked out a 2.8 point gain, and the Nasdaq100 added 0.43%. Breadth was positive, 1.2 to 1, on below average volume. RSI's were little changed, with the Nasdaq100 still remaining in the 40's. ROC(10's) were mixed, and remain in positive territory. For the week, the DJIA added 0.4%, the S&P lost just 3 points, and the Nasdaq100 slipped 0.9%. Consumer staples was one of the best performing sectors last week, up 0.89%, while consumer discretionary was the worst, down 1.33%. Bonds moved down last week as yields moved higher. The VIX was nearly flat last week and has been trading near recent lows. It finished down on Friday at 12.92.

Long term trend continues with an upside bias, with the DJIA closing at a new high and the S&P within striking distance. With the S&P unable to reach new highs and the Nasdaq100 nearly 200 points away, the choppy action keeps us cautious of topping action. The Nasdaq100 is the only index with weak short term technicals. It remains below its recent 50% retracement level of 3586. Near term we are watching 3586 in the Nasdaq100 to indicate positive bias. For the S&P, we look for a test of the recent closing high of 1890, otherwise we see more choppy action. Ukraine continues to move toward breakup or civil war. A plethora of economic reports this week: PPI, Retail Sales, Housing, etc. U.S. futures are higher pre-market.

MAJOR INDICES Short term support and resistance level

DJIA

close 16583

SP500

close 1878

N100

close 3555

16583

16600

1875

1888

3553

3562

16500

16631

1868

1890

3550

3575

16442

16700

1865

1897

3549

3586

16400

16750

1861

1900

3537

3588

16376

16800

1852

1912

3525

3600

16300

 

1843

1925

3517

3604

16250

 

1840

1937

3512

3612

   

1825

1950

3500

3619

   

1815

 

3488

3625

Click to enlarge

Major Economic Reports Today

Treasury Budget-2:00pm

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