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Today's Technical Outlook-7/10/2012

Market Summary

David Chojnacki S1F Market Technician

Another low volume session to start the week with little change in the major averages at the close. On a positive note, we did see the DJIA and S&P 20D-SMA's cross above their 50D-SMA's. At the close, the DJIA was off 36 points, the S&P lost just 2.2 points, and the Nasdaq100 gave up 1.9 points. Breadth was negative, 1.3 to 1, and volume light for the session. RSI's dropped a bit, but ROC(10's) remain positive and advanced in the session. With near term strength slightly weaker, short term bias is unable to gain any upside momentum. The ADX, which measures the strength of a trend, is currently 16. Below 20 is usually an indication of a consolidating market. The VIX is at a tame 17.98, indicating little volatility. Daily trading, however, has seen some wild daily swings, which is reflected in the wide spread of the Bollinger Bands. We remain below the June highs, but the S&P held just above the 50% retracement(1348) of the last down leg. The Nasdaq100 however, is just below its 50% retracement of 2621. Look for the Nasdaq100 to have support at 2600 and 2588. Upside resistance presents itself at 2621-25 and 2647-50. The S&P will see support at 1348 and 1339. Upside resistance is now at 1357-63 and 1375. The DJIA is holding its key moving averages, but along with the S&P is down now for three straight sessions. Look for support near 12685-87 and resistance to be at 12810-837 and 12900. The VIX moved up 5.1% in yesterday's session, closing at 17.98. Earnings reports will be key the next couple weeks. This morning we see futures up, on a beat by Alcoa and positive headlines out of Europe.

Major Economic Reports Today

No reports scheduled

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