David Chojnacki S1F Market Technician
Once again we had a choppy session, with the averages trading in narrow range. The indices were able to stage a late run to the upside which kept the indices off their lows for the day. The Nasdaq100 and S&P recovered after trading through some formidable levels to close just near or above those levels. At the close, the DJIA lost 28.5 points, the S&P dropped 2.2 points, and the Nasdaq100 slipped just 7.5 points. Breadth was negative, 2 to 1, on above average volume. RSI's slipped a bit more and now clearly indicate near term over-sold conditions. ROC(10's) remained negative, but rose in the session indicating the accelerated selling had somewhat abated in the session. Breadth, while negative, was not as widespread as in the prior session. The question then arises; is the selling beginning to exhaust itself? The DJIA traded down to 12496, just below 12500, where it finds some formidable chart support. A 10% correction in the DJIA would take the average down to 12249. A close below 12500 and the DJIA will be headed to its June closing low of 12101. The Nasdaq100, after trading as low as 2514, closed just a point below 2525, which is formidable support. If we can get above that level in today's session, we may see a near term bounce. Near term support, for the Nasdaq100, sets up as 2512 and 2500. Upside resistance is now at 2550 and 2575-78. The S&P continues to have near term support at 1349-50 and at 1337. Upside resistance sets up as 1371-75 and 1381. The VIX closed slightly changed at 17.99. The VIX still does not reflect the weakness in the Market. Europe and the Mid-East continue in the headlines. The U.S. fiscal policy and upcoming new tax rules will weigh on the Market once again. Futures are mixed this morning giving little indication to the opening bias.
Major Economic Reports Today
Net Long Term TIC Flows-9:00am Industrial Prod./Capacity Util/-9:15am
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