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Today's Technical Outlook - 2/25/2013

Market Summary

David Chojnacki S1F Market Technician

After two days of nearly a 2% pullback, the Market started to the upside on Friday and held that strength into the close. The buying was fairly steady during the session and the major averages closed near their highs of the day. The indices erased 50% of the losses in the prior two sessions. At the close on Friday, the DJIA was up 0.86%, the S&P adding 0.88%, and the Nasdaq100 gaining 0.95%. Breadth was decidedly positive, 3 to 1, on average volume. For the week, the DJIA and S&P were little changed, down just 0.1% and 0.2%, respectively. The Nasdaq100 was a little weaker, giving up 0.9% on the week. The Market was due for some consolidation after the gains made since Jan 1. The S&P meets resistance in the 1525 to 1540 area, and it was at 1530 during the week when the S&P reversed and moved down 2%. The S&P found support just above 1494, which was a near term level of support. A drop below 1494 and we can test the 1460-1475 levels. 1460 and 1540 are the boundaries of a 1 year up-trending channel. The Nasdaq100 developed a complex head and shoulders back in the Aug.'12 to Oct.'12 timeframe, with the neckline near 2718-2725. This level is key to the future short term direction of the index. It has been trading near this level since Jan. 1. MACD's continue below signal for all 3 major indices.

Trading Trends

David Chojnacki S1F Market Technician

March will mark the 4 year anniversary of an up-trending market, since the reversal from the 50%+ loss of the financial crisis in 2007 to 2009. It has taken the DJIA and S&P 4 years to get close to challenging the 2007 levels. The Nasdaq100 has held above its 2007 high since Oct. 2011. Expect some challenging resistance before the indices can move to new highs. Short term we expect resistance just ahead of current levels and it may take some time before we challenge old highs. Near term look for 1530 in the S&P and 2725 in the Nasdaq100 to provide a pivot point for bias. 2 weeks of heavy economic data, Market moving news from Europe, and Washington Crisis(Sequester), Bernanke, should make for some interesting weeks. Prophylactics are a must.

MAJOR INDICESShort term support and resistance level

close 14000


close 1515


close 2737

13953 14000 1512 1525 2734 2750
13930 14125 1511 1530 2730 2751
13800 14198 1500 1540 2725 2762
13725 14250 1494 1550 2721 2775
13700 14300 1488 1562 2718 2788
13656 14375 1475 1576 2714 2800
13610 14500 1462 1588 2712 2812
13600   1460 1600 2709 2825
    1450   2700  

Major Economic Reports Today

No reports scheduled



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