David Chojnacki S1F Market Technician
After pulling back 2.9% in the prior three sessions, the Market tried to regain some of that ground yesterday. A good open pushed the S&P to 1331, which was the mid-point of the large down candle developed on 7/11/2011. This area of 1325-1330 has provided resistance before in the S&P. The indices reversed in the afternoon and closed with only small gains. Short term bias continues to the upside as the indices remain above some key short term technicals, but expect the Market to remain volatile. The S&P closed 3 points above its 50D-SMA, and the DJIA and Nasdaq100 are comfortably above. We are bordering close to the 50% retracement level of the last up-leg in the S&P. This is at 1314 and is a key level to watch for a continuation of the short term
up-side momentum. Near term, technicals have weakened and we may see a little more consolidation or pullback. Gold continued to move to the upside as we saw the IAU(iShares Gold Fund) close at a new high of 15.45. The VIX was up slightly to close at 19.91. It is now above the closely watched short term averages and its MACD has moved above signal. A few key economic reports this morning before the open. Futures this morning have been volatile and currently are suggesting a slight open to the upside.
Major Economic Reports TodayInitial/Continuing Claims-8:30am Retail Sales-8:30am PPI-8:30am Business Inv.-10:00am
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