David Chojnacki S1F Market Technician
A lethargic open to the Market as all eyes were focusing on the FED decision and Bernanke conference mid-afternoon. The S&P traded in a 6 point range from opening till 2:00PM when we saw the averages begin to subside. There were no surprises in the rate announcement, but in his speech there was a hint of tapering by the end of 2013. There was enough in his speech to convince investors to begin taking profits and the sell-off commenced. The averages were at their lows of the session at the final bell. At the close, the DJIA and S&P were down 1.3%, and the Nasdaq100 was off 1.2%. Breadth was extremely negative, 4.8 to 1, on average volume. RSI's moved down into the upper 40's and ROC(10)'s declined. All three major averages dropped back below their 20D-SMA's, but still manage to hold their 50D-SMA's. MACD's remain below signal. The S&P did close above the 1625 support level, but that looks suspect this morning. There was little change in the VIX, as it closed up only 0.04, to 16.64. This was a bit of a surprise given the weakness in the major indices. The U.S. dollar rose significantly as equities dropped. The S&P has traded in a recent channel of 1598 to 1654. A drop below 1598 could take us down to at least 1540's before we find formidable support. The S&P has near term support at1625 and 1612. Near term resistance sets up at 1637-42 and 1650. The Nasdaq100 has near term support at 2950 and 2937. More important support sets up at 2916 to 2900 levels. Upside resistance for the Nasdaq100 sets up as 2962 and 2975. Overseas markets followed the U.S. lead and are down significantly. U.S. futures are considerably lower pre-open. Technicians will be watching for support at the bottom of recent trading range.
Major Economic Reports Today
Initial /Continuing Claims-8:30am Existing Home Sales-10:00am Phila FED-10:00am Leading Indicaqtors-10:00am NatGas Inv.- 10:30am
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