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Market Summary

David Chojnacki S1F Market Technician

The Market opened Friday to the downside, disappointed by weak Employment numbers. It continued the weakness into the close with no sign of buyers at reasonable support levels. At the close, the DJIA was down 2.2%, the S&P losing 2.4%, and the Nasdaq100 giving up 2.6%. Breadth was decidedly negative, 6 to 1, on above average volume. For the week, the indices gave up last week's bounce and more. The DJIA lost 2.6%, the S&P gave up 2.9%, and the Nasdaq100 losing 2.7%. We noted last week that longer term technicals were coming under attack. The S&P and DJIA have now dropped below their 200D-SMA's, 1284 and 12254, respectively. All three major indices are right near the 10% correction level from the recent April highs. Last week's significant sell-off left us near over-sold conditions with RSI's near 30 or below. ROC(10's) have once again become negative and are declining. The Nasdaq100 held its 200D-SMA(2435) on Friday, but is dangerously close. It did fall through its 50% retracement level at 2467. The S&P also went through that level which is 1288. The Fibonacci .61 retracement level for the S&P is at 1257, and may provide some support. The same level for the Nasdaq100 is 2390. The VIX broke above its recent range and above its 200D-SMA(25.16). It closed at 26.66.

Trading Trends

David Chojnacki S1F Market Technician

Long term, the upside bias is in jeopardy, as key long term technical levels are being violated. We will look for confirmation this week. The prior week's bounce was short lived and short term technical weakness continues. We broke through 50% retracement levels and 200 day averages for the S&P and DJIA. Near term, we are approaching over-sold levels and a bounce is not out of the question. Expect it to be short and the Market to remain volatile as near term technicals are very weak. Expect Europe to remain upfront in the news. Economic reports are few this week, but we get the Fed's Beige Book on Wednesday, which may give some insight to the health of the economy. Futures are flat this morning, indicating indecision at the open.

Major Economic Reports Today

Factory Orders-10:00am

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