David Chojnacki S1F Market Technician
A bit of choppy action in the first half hour gave way to a declining Market for the remainder of the AM hours. After the President's press conference, the indices fell precipitously into the close, leaving the averages down significantly. At the close, the DJIA fell 1.4%, the S&P dropped 1.39%, and the Nasdaq100 gave up 1.1%. Breadth was hugely to the downside, 9 to 1, on above average volume. RSI's fell to levels not seen in months and are now clearly below over-sold levels for all three major indices. ROC(10's) remained negative and declined in the session. The Nasdaq100 traded below the 10% correction level for the entire session and moved toward 2525, where we find some formidable resistance. It hit a low of 2528 in the session and closed just a few points above. There were no buyers in yesterday's Market as sellers abounded. The only buyers we had across our trading desk were buyers of inverse ETF's. The DJIA closed below its 61% (Fibonacci) retracement level(12674), while the S&P held just above that level which stands at 1349. With yesterday's action, it appears inevitable that we get a 10% correction in the DJIA and S&P, to go along with the Nasdaq100 which has already surpassed that milestone. The S&P now has near term support at 1349-50 and at 1337. Upside resistance is now at 1371-75 and 1381. The Nasdaq100 continues to lead to the downside and is now 11.6% below the September high. Yesterday it traded as low as 2528, just a few points above the 2525 support level. There is a congestion area between 2650 and 2525 which formed in the summer which may provide some support. A break through this area could take it down to the June closing low of 2458. The VIX jumped 7.6% to close at 17.92. We get Initial Claims and CPI this morning. Europe and the Mid-East are once again in the headlines. Futures were higher earlier this AM, but reversed on weak Walmart revenues.
Major Economic Reports Today
Initial/Continuing Claims-8:30am CPI-8:30am Empire Manufacturing-8:30am Phila Fed-10:00am Crude Inv. -11:00am
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