David Chojnacki S1F Market Technician
In the shortened session, before the holiday, the indices moved down at the open and then were flat during the session, losing several points going into the close. Activity and volume reflected the half day. At the close, the DJIA was off 51 points, the S&P lost just 3.4 points, and the Nasdaq100 slipped 6 points. Breadth was negative, 1.5 to 1, on volume which was light. The activity was in a narrow range, but the recent weakness continued with the major averages losing in 3 of the last four sessions. RSI's reflected the recent poor performance, with the Nasdaq100 dropping just below 50, while the DJIA and S&P held in the low 50's. ROC(10's) moved into negative territory for all three indices. MACD's have begun to slope to the down-side, and the DJIA MACD is nearing its signal. The DJIA found support in the session near its 20D-SMA and despite the weakness, short term bias remains to the upside. The S&P is nearing some important near term support in the 1420-25 area. It remains in the wider trading range of 1375 and 1435. A few attempts to break out of this range have failed. Look for near term support at the 1420-25 area and at the 1409-12 area. Resistance on the upside is 1435 and 1450. The Nasdaq100 remains in the 2600 to 2700 trading range. The last close on the Nasdaq100 put it several points below the 50% retracement level(2661) of the June to September upside rally. Once again this puts pressure on the short term upside bias. The Nasdaq100 is just below its 20D-SMA(2665) and moving toward its 50D-SMA(2654) which is near term support. Additionally it should find support at 2653-50 and at 2625. On the upside we find resistance at 2661, 2675 and 2694-2700. The VIX closed at 17.84, and has traded at the highest levels in some time. Economic news is light this week, with additional indications in the housing market. Futures are up slightly in early trading.
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