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Today's Technical Outlook 11/12/2012

Market Summary

David Chojnacki S1F Market Technician

After two days of post-election moratorium, the Market finally caught a bid and finished slightly to the upside. Weakness abounded in the Market and selling picked-up across our trading desks. At the close, the DJIA added just 4 points, the S&P tacked on a miserly 2.3 points, and the Nasdaq100, the strongest, up 11.5 points. Breadth was slightly negative, on average volume. For the week, the DJIA lost 2.1%, the S&P gave up 2.4%, and the Nasadq100 dropping 2.7%. Last week's election was the big Market driver and projected increases in dividend and capital gains taxes weighed on the indices. The Nasdaq100 hit the 10% correction level and finished Friday just above that level(2578). RSI's are close to oversold levels, so we may see a brief bounce. The DJIA dropped below its 50 week(NYSE:SMA) and along with the S&P are now seeing weak long term technicals. The Nasdaq100 has also moved below the 50 week level and has already confirmed a longer term breakdown. The Nasdaq100 has some support near the 2525 level. The S&P and DJIA are about to confirm long term breakdown and a 10% correction in the S&P would take us down to the 1319 level. Near term it has support near the 1371-1375 area. This week we get some information on inflation, as we get PPI and CPI numbers, along with FOMC minutes.

Trading Trends

David Chojnacki S1F Market Technician

Long term, theNasdaq100 has confirmed a long term breakdown and has substantiated a 10% correction. The DJIA and S&P have violated several support levels and we look for a confirmation this week. Expect them to follow the Nasdaq100 to a 10% correction. Short term the bias continues to the downside for all indices. Near term, we are approaching over-sold conditions and we may see a slight bounce, similar to what happened on Friday. We will watch the Nasdaq100 this week, to see if the 10% correction exhausted its downward trend, however, we believe there is still further to go. The VIX has not reflected the weakness in the Market, though it gained slightly on Friday to finish the week at 18.61. Futures are up slightly this morning versus fair value.

MAJOR INDICESShort term support and resistance level
DJIA

close 12815

SP500

close 1379

N100

close 2584

12810 12851 1375 1381 2578 2588
12724 12992 1371 1384 2575 2600
12674 12998 1362 1393 2550 2612
12500 13000 1350 1400 2525 2613
  13028 1349 1412 2512 2625
  13125 1337 1420 2500 2650
  13207 1325 1422 2450 2662
  13250 1319 1425   2663
    1300 1433   2673

Major Economic Reports Today

No reports scheduled
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