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Today's Technical Outlook - 11/19/2012

Market Summary

David Chojnacki S1F Market Technician

Friday's session began with the Market moving down in the AM hours to new lows in this current pullback. Just before noon the indices caught a bid and began to move back above some key supports levels. All three major averages hit near the bottom of their Bollinger Bands and reversed to finish positive at the close. At the close, the DJIA rose .37%, the S&P added .48%, and the Nasdaq100 was up .39%. Breadth was positive, 2.9 to 1, on significantly higher volume, partly attributed to options expiration. The averages did not perform well for the week, as the DJIA gave up 1.7%, the S&P lost 1.4%, and the Nasdaq100 dropped 1.9%. All three averages are now below their 50week-SMA and continue below the 50% retracement level. There were some encouraging signs from Friday's mid-day reversal in that the S&P and Nasdaq100 closed above some key support levels. The S&P moved back above 1349-50 and the Nasdaq100 closed above 2525. If we can hold these levels, there may be some pause in the pullback, as all three major indices are near an over-sold condition. We also had 'Hammers' develop on Friday for each of the indices, signaling a possible near term reversal. The Nasdaq100 is now down 11.5% from its September high and the S&P is off 7.2%. In a holiday shortened week, we get some housing data and Leading Indicators.

Trading Trends

David Chojnacki S1F Market Technician

Long term, all three major averages have confirmed a longer term pullback and bias is to the downside. We expect the S&P and the DJIA to follow the Nasdaq100 down to 10% correction levels. Short term the bias continues to the downside for all indices. Near term, Friday's mid-day reversal, left some hope that we may see a pause in the sell-off and see some consolidation before we either get a reversal or move toward the June lows(Nasdaq100- 2458, S&P- 1278). The VIX continues to defy the Market weakness and has not reflected the Market's poor performance. It closed Friday at 16.41, remaining in a relatively tame volatility level. Futures are up this morning versus fair value.

MAJOR INDICESShort term support and resistance level
DJIA

close 12588

SP500

close 1359

N100

close 2534

12500 12600 1350 1362 2525 2550
12400 12674 1349 1371 2512 2575
12250 12724 1337 1375 2500 2578
12249 12810 1325 1382 2475 2588
12101 12991 1319 1384 2458 2600
  12992 1312 1393 2450 2612
  13000 1300 1400 2443 2613
  13012 1278 1402   2625
    1275 1412   2631

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ALL PRICES NOTED IN THIS PUBLICATION ARE AS OF THE CLOSE ON TRADING PRIOR TO TODAY'S DATE, UNLESS OTHERWISE INDICATED

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