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Today's Technical Outlook 9/5/2012

Market Summary

David Chojnacki S1F Market Technician

A flat opening became a decline once the ISM index and construction spending numbers were reported at 10:00am. The Market continued its decline until late morning and then was flat until 2:00pm. A rally ensued in the late afternoon and continued into the close, but was unable to move the indices into positive territory. At the close, the DJIA was off .4%, the S&P gave up 1.6 points and the Nasdaq100 losing just 0.21 of a point. Breadth was positive, 1.5 to 1, on below average volume. RSI's fell some, with the DJIA's dropping below 50. ROC(10's) remained negative, but rose in the session. MACD's remained below signal for all three indices. As we noted at the end of last week, some near term technical weakness has begun to show up. We did remain in a technical trading range, and the S&P has now found support in the last three sessions in the mid to upper 1390's. The DJIA and S&P remain below their 20D-SMA's. While the S&P and Nasdaq100 remained just below the recent attempt at new highs, the DJIA has dropped 1.8% from the closing high(13275) on August 17th. Continue to look for the S&P to find near term support just near 1395 and upside resistance at 1411. The wider range is 1375 to 1425. The Nasdaq100 continues to be the stronger of the indices(RSI-61) and is closest to breaking through and making new highs. It maintains near term support at 2750 and resistance at 2784. The DJIA has traded mostly between 13000 and 13275 for a good part of the month of August. 13279 will continue to provide upside resistance for the DJIA. The VIX was as high as 19 at one point yesterday as volatility begins to creep into the Market. The VIX closed at 17.98, up 2.9%. Futures are lower this morning versus fair value.

Major Economic Reports Today

Productivity/Unit Labor Costs-8:30am

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