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Today's Technical Outlook - 1/14/2013

Market Summary

David Chojnacki S1F Market Technician

A flat open on Friday was followed by a very narrow trading range for most of the session. The S&P traded in only a 5 point range, however, at the final bell it was near its highs of the day. At the close on Friday, the DJIA finished up 17 points, the S&P was nearly flat, off .07 of a point, the Nasdaq100 added on 4 points. Breadth was slightly positive on below average volume. For the week, the DJIA and S&P were up 0.4%, and the Nasdaq100 added 0.8%. It was the first full trading week of the new year and the S&P traded in only a 15 point range. The indices continue to consolidate the gains of the first two sessions of the year, as investors remain cautious. For now the S&P has assumed the lead among the major indices as the Nasdaq100 continues to lag. The S&P closed the week at a 5 year high. The Nasdaq100 is 4% below its high established in September of 2012. Near term and long term technicals remain strong. RSI's are moving into the 60's, suggesting that we are nearing over-bought conditions. The ADX, which gives an indication of the strength of the momentum, is fairly weak, suggesting continued flat trading. Sideways trading is confirmed by the VIX, which is at very low levels, closing at 13.36 on Friday. Futures today are lower versus fair value.

Trading Trends

David Chojnacki S1F Market Technician

The major indices continue to possess long term strength as they remain above key moving averages and near 5 year highs. We continue to watch the Nasdaq100 to confirm the S&P breakout to new highs. Short term, we remain above key Fibonacci levels and RSI's remain strong. Near term, we have spent the last seven sessions in a very narrow range as the indices attempt to consolidate. All three indices are developing a nice 'handle' suggesting that further moves to the upside are in the offing. There are several indicators pointing to additional sideways action. Investors will be looking to 4th Qtr. earnings reports, to see if fundamentals confirm the strong technicals. European markets are up in early trading as the euro continues to gain on the US dollar.

MAJOR INDICESShort term support and resistance level

close 13488


close 1472


close 2748

13400 13500 1465 1475 2734 2750
13267 13610 1450 1488 2730 2762
13202 13700 1441 1500 2725 2775
13125 13725 1435 1525 2712 2788
13085   1430 1540 2709 2800
13082   1425 1560 2700 2812
13023   1422   2688 2825
13000   1420   2682 2850
    1417   2675  

Major Economic Reports Today

No reports scheduled


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