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Today's Technical Outlook - 1/9/2015

Jan. 09, 2015 12:28 PM ET
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Market Summary

David Chojnacki - Market Technician

Equities followed through on another radical reversal that started on an FOMC minutes day. This is the third V-shaped reversal that was predicated by the FED. The major indices gapped-up at the open and never looked back, registering significant gains at the close. Equities finished near their highs of the session and on a pick-up in volume. At the close, the DJIA was up 1.8%, the S&P added 1.79%, and the NDX moved up 1.9%. Breadth was decidedly positive, 3.4 to 1, on slightly above average volume. RSI's moved up, with the three major indices back into the 50's. ROC(10's) advanced, however, all three major indices remained in negative territory. It was the second straight session with a strong move to the upside, reversing nearly a 5% pullback. The NDX has been the strongest performer in the two sessions and may be looking to establish its upside leadership. All three major indices moved above key technical levels. They moved above their 20 and 50D-SMA's and key retracement levels. This establishes near term bias to the upside. Internals also improved in the session, with the ARMS finishing at 0.60, a strong reading. The next critical resistance for the NDX is at 4314, and at 2075 for the S&P. IWM(small-caps) was up strong for the second straight session finishing at 118.71. The VIX was down 11.9%, and down 19.4% in the last two sessions. It stands at 17.01. Near term support for the S&P is now at 2050 and 2044, 2045. Upside resistance is now at 2075 and 2088. The NDX near term support is now at 4225 and 4200. Upside resistance is at 4250 and 4275. European markets are moderately lower this morning. Global economic and debt issues continue to be in the background. Employment report this morning. U.S. Futures are lower this morning before the open.

Major Economic Reports Today

Employment Report-8:30am Wholesale Inv.-10:00am

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