David Chojnacki S1F Market Technician
The Market opened with a move to the downside which continued to accelerate during the first hour. It then appeared that the indices stabilized, but when the S&P crossed below the 50% retracement level of last leg(1314), another round of selling ensued to push the averages to a significantly lower close. The DJIA and S&P are now below their 20 and 50D-SMA’s and their MACD crossed below signal. RSI’s have dropped to the low 50 and below levels for all three major indices and the ROC(10) is declining. The Nasdaq100 dropped through its 20D-SMA, but still holds its 50D-SMA and the 50% retracement level of 2303. While near term technicals were just beginning to deteriorate, after three DJIA sessions to the downside, we saw the strength of the near and short term
indicators decline in one session. Today will be key to see if this is confirmed or was yesterday’s session just another in this string of volatile sessions. Watch the (.38) Fibonacci level of 1302 and 12245 in the S&P and DJIA respectively, as next support levels. 1295 is also key support for the S&P. 2317, the 50D-SMA, and 50% retracement of 2303, are key supports for the Nasdaq100. Moves below these levels could send the averages back toward their 200D-SMA’s and June lows. The VIX up 13.5% to 22.98, a level which has provided resistance several times in the past. Futures early this morning are slightly higher versus fair value, indicating a flat to higher open.
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