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Today's Technical Outlook - 6/24/2013

Market Summary

David Chojnacki S1F Market Technician

After two big down days, the Market opened to the upside bouncing off the recent low. The S&P had fallen 4.8% from the May closing high of 1669, before Friday's open and a bounce was inevitable. The bounce lasted only briefly as the averages quickly fell into negative territory. Heavy volume related to options expiration and some bargain hunters helped to get the DJIA and S&P just barely into positive ground by the close. At the close on Friday, the DJIA was up 41 points, the S&P added 4.2 points, and the Nasdaq100 slipped 0.43%. Breadth was fairly even on very heavy, options related volume. For the week, the DJIA lost 1.7%, the S&P gave up 2%, and the Nasdaq100 falling 2.2%. The major averages broke some key technical levels last week. The indices fell below the recent trading range and closed below their 20 and 50D-SMA's. RSI's are just barely in bullish territory and ROC(10's) moved into the negative. MACD's remain below signal. After the long bull run since last November, with only minor 3% pullbacks, the major markets were due for some correction. Fear of the FED slowing the easy money policy and weakness coming from China may finally give us a more meaningful correction. The 10-year has moved above 2.5%, which will also put some pressure on equities. The VIX closed down 7.7% to 18.90.

Trading Trends

David Chojnacki S1F Market Technician

Long term technicals continue to remain positive, keeping the bias to the upside. Short term technicals have weakened considerably and we are in the mist of the largest pullback since the November rally began. We have broken below an 8 month trading channel and indications are for additional weakness. The S&P has some support near 1575, but it looks like we want to test the 1540-48 area. 1548 would take us down to the 38% Fibonacci retracement level. Near term, the markets tried to bounce off the lows on Friday and failed. Near term technicals are biased to the downside. The VIX is indicating higher volatility. Some key economic reports this week. Markets are lower in Europe and the Futures are down significantly this morning. Today could be ugly.

MAJOR INDICES Short term support and resistance level

DJIA

close 14799

SP500

close 1592

N100

close 2877

14700

14800

1588

1597

2875

2888

14688

14865

1575

1600

2862

2900

14600

14887

1562

1612

2850

2912

14500

14952

1550

1618

2837

2916

 

15000

1548

1625

2825

2925

 

15023

1540

1631

2812

2932

 

15125

1537

1637

2800

2937

 

15145

1531

1640

 

2950

     

1650

 

2962

Major Economic Reports Today

No reports scheduled

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