David Chojnacki S1F Market Technician
Poor Claims numbers and diminishing hopes for a fiscal deal set the major averages to the downside after the first half hour. With weakening technicals contributing to the drop in prices, the indices were off more than 1% by mid PM. The averages turned around in the last hour and a half to close with only minor losses. The turn-around may have been technical or a result of an announcement that Congress would be coming back to town on Sunday night. At the close, the DJIA dropped 18 points, the S&P slipped 1.7 points, and the Nasdaq100 giving up 4.2 points. Breadth was negative, 1.2 to 1, on light volume. RSI's slipped a few more points to the mid and upper 40's for the major indices. ROC(10's) continued in negative territory, but advanced in the session. During the session's weakness, the DJIA slipped below its 200D-SMA and the S&P was briefly below its 50D-SMA. The S&P joined the other two major averages, seeing its MACD fall below signal. Once again some of the weakening short term technicals signal caution to the rally which began in mid-November. Of specific concern is the Nasdaq100, which remains below the 50% retracement level and fell below the Fibonacci 61% retracement level in yesterday's session. During the session, it touched the bottom of the recent trading range(2600), but bounced off to finish comfortably above at 2632. Look for support at 2625 and 2600. On the upside resistance can be found at 2650 and 2661. The S&P closed just below support of 1419-1425. During the session it tested near the 1400 level and traded below its one year trend-line, which is near 1412. Look for 1409-1412 to remain as support, but a close below would signal a move toward the 1371-75 area. 1420-25 becomes resistance, with the next level at 1435. Any kind of a fiscal deal looks to be weak, or delayed. Any near term optimism will probably be short lived. Markets are weak overseas and Futures are lower before the open.
Major Economic Reports Today
Chicago PMI-9:45am Pending Home Sales-10:00am Nat Gas Inventories-10:30am Crude Inv.-11:00am
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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