David Chojnacki S1F Market Technician
The Market traded in a very narrow range, for most of the session, as parts of the financial industry were observing Veterans day. The indices were little changed at the close and volume was significantly lower than normal. At the close, the DJIA was off just 0.31 of a point, the S&P lost 0.18 of a point, and the Nasdaq100 falling 1.3 points. Breadth was slightly negative, on half the normal volume. RSI's remained fairly stagnant and ROC(10's) remained negative and were mixed. The Nasdaq100 did manage to close just above the 10% correction level of 2578, as the indices are close to over-sold conditions. The S&P closed just below its 200D-SMA(1381), while the DJIA remained below the 50% retracement level of 12851. Technicals remain weak across the board and we'll watch the Nasdaq100 to give any signals that the pullback is currently over. Near term technicals suggest that we may get a brief bounce at these levels, however, the Nasdaq100 would have to get back above 2661 before we could see a reversal to the upside. The Nasdaq100 has support at 2575 and 2550 near term. Upside resistance is set at 2600 and 2613. The S&P has fairly good support near 1371-75 area and we would need to fall through this area before we see a 10% correction down to the 1319 level. Near term upside resistance sets up as 1384 and 1393. The S&P short term bias remains to the downside as long as it remains below 1425. Year to date the major indices continue to be ahead for the year: DJIA + 4.8%, S&P- +9.7%, Nasdaq100-+13.3%. With dividend and capital gains taxes expected to rise next year, we would expect to see some profit and tax selling before year end. The VIX dropped 10.3% to close at 16.68. It is one of the indicators that continues to divert and not suggest further weakness. Futures this morning are once again lower versus fair value.
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