David Chojnacki S1F Market Technician
Friday began with buyers stepping up at the open, but they were quickly met by sellers who began the gradual retracement into the close. It was options expiration and a S&P rebalance which caused the volume to swell, but at the final bell prices were nearly flat on the session. At the close on Friday, the DJIA was down 17.4 points, the S&P off just 0.11 of a point, and the Nasdaq100, nearly flat, slipped 0.06 of a point. Breadth was positive, 1.5 to 1, on heavy volume. For the week, the DJIA was off 0.1%, the S&P down 0.3%, and the Nasdaq100 added .2%. The indices remain just off the recent highs and spent all of last week digesting the prior week's gains. The 1462-65 area has proved to be formidable resistance for the S&P, however, the major indices are forming a 'handle' from which to launch a new move to the upside. The open ended FED policy is forcing investors to move into equities as no one wants to fight the FED. Technicals for all time horizons remain strong. Last week's consolidation removed some of the building 'over-bought' situation and it appears indices are poised for additional upside. As we go into the end of the month and quarter, we may see additional portfolio repositioning.
David Chojnacki S1F Market Technician
Long term, the bias remains to the upside, as we remain at or near the new highs. Short term technicals continue strong and we see no indications of weakness at this point. Near term, the averages have been running into some formidable resistance. The S&P has met resistance on several occasions at 1462-65 and the Nasdaq100 at 2875. It appears we are going through a healthy consolidation, but we will monitor to make sure that traders are not telling us that we are hitting a near term ceiling at these levels. We may see further month and quarter repositioning this week, but expect to see more action in the first weeks of October, as additional economic and earnings' news comes into play. Futures this morning are lower versus fair value.
|MAJOR INDICESShort term support and resistance level|
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