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Today's Technical Outlook - 1/28/2013

Market Summary

David Chojnacki S1F Market Technician

The Market got off to a positive start on Friday and continued that momentum into the closing bell. Once again the DJIA and S&P closed at new highs. The Nasdaq100 also participated in the positive action, finally showing some strength. At the close on Friday, the DJIA and S&P were up 0.5% for the session, while the Nasdaq100 gained 0.48%. Breadth was positive, 1.6 to 1, on below average volume. For the week, we had mixed results with the DJIA gaining 1.8%, the S&P adding 1.1%, and the Nasdaq100 finishing down 0.2%. While the DJIA and S&P continue a slow slog up, the volume this week was weak, leaving the moves to new highs without much conviction. The ADX is finally moving over the 25 level indicating that some momentum is behind this move. The Nasdaq100 held back by AAPL, was slightly lower on the week and is back in the trading range it has been in since Jan. 2nd. We saw its MACD cross below signal during the week, but so far it has been finding support near its 20D-SMA, which now stands at 2721. Its 50D is also poised to cross back over its 200D-SMA. There is 1 year trend-line support in the 2730's. With the S&P and DJIA closing at new highs, it looks like they are set to challenge their highs of 1576 and 14198 from 2007. With the VIX at 2007 lows it appears traders are complicit with the upside bias.

Trading Trends

David Chojnacki S1F Market Technician

The major indices continue to possess long term strength as the DJIA and S&P move to new highs. We continue to watch the Nasdaq100 to confirm the breakout. Short term, we remain above key technical levels and the bias is to the upside. Only the Nasdaq100 has shown some signals which portray some weakness in the short term. The signals are mixed and hopefully this situation will shake out this week. Near term, the DJIA and S&P continue moving to new highs and are beginning to reach over-bought levels. Some consolidation at these levels is not out of the question. Economic reports are heavy this week and should give us a better picture of the strength of the recovery. Futures are mixed in early trading.

MAJOR INDICESShort term support and resistance level

close 13895


close 1502


close 2736

13800 13930 1500 1512 2734 2750
13725 14000 1488 1525 2730 2762
13700 14125 1475 1540 2725 2775
13610 14198 1466 1550 2721 2788
13500 14250 1465 1576 2712 2800
13472   1450 1588 2709 2812
13400   1435 1600 2700 2825
        2693 2850

Major Economic Reports Today

Durable Goods Orders-8:30am Pending Home Sales-10:00am



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