David Chojnacki S1F Market Technician
Selling continued with another day of very heavy volume. The last two sessions giving some indication of capitulation type activity. The three major averages losing between 5.5% and 6.6% in the session. RSI’s are in the high teens to low 20’s indicating an extremely over-sold condition in the near term. The indices are having little respect for support levels as we continue to break through new levels each day. The averages closed below their lower Bollinger Band which also makes a case for a bounce. We seemed to have bounced off the 1120 level in the S&P yesterday, and closed just near that level. Perhaps we may have some support at this level. Next important level in the S&P is a Fibonacci retracement level at 1103 and chart support at the 1100 area. For the DJIA, we see support at 10448 and also at 10355. The Nasdaq100 big picture situation is slightly different then the DJIA and S&P. The Nasdaq100 remains above its 75% retracement level of the 2007-2009 down leg, which is at 1940. We have support at 2025-2000 on the charts, the 1940 level, and the at Fibonacci retracement level of 1900. Futures this morning are pointing to a bounce to the upside at the open. Bias continues to the downside for all periods and despite a near term bounce, we may test the next support levels before we begin to build a bottom. The VIX is at levels not seen since May of 2010, closing at 48. The FOMC speaks this afternoon and may shed some light on future interest rates and the dollar.
Major Economic Reports TodayProductivity/Unit Labor Costs-8:30am FOMC Rate Decision-
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