David Chojnacki S1F Market Technician
After some early morning sluggishness, the Market began moving to the upside and that momentum increased in the mid-afternoon. The indices once again bounced off the bottom of their current trading range and began a move to the upside. Breadth was positive about 2.2 to 1, on average volume, as the major indices gained between 1.2 and 2.5%. Near term technicals remain weak, however, we saw an increase in the RSI’s to the mid 40’s and ROC(10) advance for the S&P and DJIA. The Nasdaq100 was the weakest of the indices and its ROC(10) continued its decline. While we had a significant price increase in yesterday’s session, technicals remain weak. The VIX, which declined 5% in yesterday’s session, remains extremely high at 39.02. With weak
technicals and volatility high, any upside move will require additional confirmation to affirm direction. The S&P will be meeting some resistance near 1175 and a move through here may provide some additional upside momentum. For the Nasdaq100, we want to see the index hold the 2244 level for a further move to the upside. The recent trading range(1120-1220-S&P), remains intact, but the developing head and shoulders pattern in the S&P and DJIA warns of possible further breakdown. Futures this morning are pointing to a strong open to the upside. Gold has had a substantial move to the downside in a relatively short time frame. Yesterday it tested its longer term trend-line support and bounced off to close above. This may signal at least a temporary pause in the correction.
Major Economic Reports TodayCase-Shiller Index-9:00am Consumer Confidence-10:00am
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