David Chojnacki S1F Market Technician
Weak economic numbers before the bell set the stage for a weak opening. The Market moved to the downside before gaining some support and moving sideways into the early PM hours. A sell-off before the FOMC statement took the averages to their lows of the day. When the statement was released and no new surprises were discovered, the averages reversed and moved to the upside. The rally was short lived and sellers came in and took the indices down into the close. At the close, the DJIA and S&P fell 0.9%, and the Nasdaq100 slipped .49%. Breadth was decidedly negative, 2.3 to 1, on average volume. RSI's slipped back into the 50's and ROC(10's) declined for the DJIA and S&P. For the DJIA, it saw its MACD slip below signal; the S&P and Nasdaq100 remain above. While the losses in the major averages were moderate, small caps(NYSEARCA:IWM), were off 2.4% on nearly three times the normal volume. Small caps are slightly weaker then large caps in the recent run-up which may be a harbinger of additional weakness in the overall Market. The VIX moved up 7.1% to close at 14.49. The S&P tested its intra-day high of 1597 and pulled back from that level. Near term resistance now sets up as 1588 and 1593, 1597. Near term support is now 1576, 1572 and 1556. The Nasdaq100, which has been out-performing of late, continued that yesterday with only a small loss. Look for support at 2862 and 2850. Upside resistance can be found at 2875-78 and 2888. More key economic reports today(see above). ECB, as expected, cut rates by a quarter per cent this morning. GM reported before the bell and beat numbers on the top and bottom line. Futures are up moderately versus fair value, pre-market.
Major Economic Reports Today
Challenger Job Cuts-7:30am Initial/Continuing Claims-8:30am Productivity/Unit Labor Costs-8:30am Trade Balance-8:30am NatGas Inv.-10:30am
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