Market Summary
David Chojnacki, Market Technician
After a big day to the downside on Thursday, the market bounced back on Friday opening to the upside. Equities gained strength in the PM hours and by the close recouped more than 50% of the prior session's losses. The market has been down 4 of the last six sessions and action has been choppy. At the close on Friday, the DJIA gained 0.99%, the S&P added 0.86%, and the Nasdaq100 was up 1.1%. Breadth was decidedly positive, 2.7 to 1, on below average volume. It was another session that volume dropped off on an up day. RSI's inched up and ROC(10)'s advanced with the DJIA and Nasdaq100 moving back into positive territory. For the week, the DJIA was down 0.9%, the S&P slipped 1.3%, and Nasdaq100 lost 1.1%. Small-caps(IWM) continue to lag the major indices and remain below their 200D-SMA. Small-caps and weak internals may be the canary in the coal mine. The VIX lost 5% on Friday to finish at 14.85, however, for the week the VIX was up 22%. Q/E 3 ends next month.
Trading Trends
MAJOR INDICES Short term support and resistance level | |||||
DJIA close 17113 | SP500 close 1982 | N100 close 4053 | |||
17102 | 17125 | 1976 | 1985 | 4050 | 4062 |
17000 | 17250 | 1975 | 1988 | 4037 | 4073 |
16939 | 17279 | 1972 | 1995 | 4025 | 4075 |
16850 | 17300 | 1960 | 2000 | 4010 | 4088 |
16800 | 17350 | 1955 | 2011 | 4000 | 4100 |
17400 | 1950 | 2019 | 3988 | 4103 | |
17500 | 1940 | 2025 | 3975 | 4112 | |
1937 | 2037 | 3950 | 4118 | ||
1925 | 2050 |
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TODAY'S DATE, UNLESS OTHERWISE INDICATED
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Major Economic Reports Today
Personal Income/Spending-8:30am PCE Prices-8:30am Pending Home Sales-10:00am
Long term trend continues with an upside bias as the major indices remain above their 20 week moving average and other key long term technicals. The Nasdaq100 and S&P, however, have been unable to move through recent highs and formidable resistance at 4125 and 2012, respectively. Short term, the S&P broke below the recent range last week and technicals weakened, threatening upside bias. The major indices have bounced off their 50D-SMA's several times. Near term, with MACD's below signal and SMA's below 20, bias is moving to the downside. Recent choppy action is another indicator of a topping formation. With weak internals we remain cautious at these levels near term. Europe is lower in early trade as China weighs on the market. US Futures are moderately lower.