David Chojnacki S1F Market Technician
After a flat opening, there was little during the session on Friday to excite traders and the major averages responded by trending to the downside during the day. At the close on Friday, the DJIA slid 35 points, the S&P lost 0.4%, and the Nasdaq100, the big loser, dropping nearly 1%. Breadth was slightly negative, on average to slightly below average volume. For the week there was little change: DJIA off 0.1%, S&P down 0.3%, Nasdaq100 sliding 0.4%. The Nasdaq100, once again, is beginning to show the weakness we saw in the beginning of November. It's testing longer term technical signals; below 200D-SMA(2672), 50D crossed below 200D, and below the 50% retracement level of June to September upside rally . Near term RSI's of the major averages are still relatively bullish, and the DJIA and S&P have not completely violated short term technical indicators. The S&P did move below it is 50D-SMA(1415) and is approaching its one year trend-line support near 1411. Since the middle of November, we have been in a trading range that may only be broken by an out come to the fiscal policy discussion. The Nasdaq100 has traded roughly between 2600-2700, the S&P between 1375 and 1435 in that timeframe. This week we get some key housing numbers and GDP, but all eyes will remain on the D.C. discussions.
David Chojnacki S1F Market Technician
Long term, we once again have the Nasdaq100 testing longer term technical levels. We are firmly entrenched in a trading range(see above) on all three major averages and this will be key in detecting any major change in bias. For now, long term bias remains positive. Short term, we have a mixed picture, with the Nasdaq100 bias to the downside, and the DJIA and S&P testing levels but still positive. We will be watching the 1371 and 12851 levels for the S&P and DJIA respectively, for indications of short term bias breaking down. Near term, we see the averages staying within the trading range till a fiscal decision is reached. Bias will be volatile within the range. Futures are mixed early this morning, with the Nasdaq100 pointing to a lower open.
|MAJOR INDICESShort term support and resistance level|
Major Economic Reports Today
Empire Manufacturing-8:30am Net Long-Term TIC Flows-9:00am
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