David Chojnacki S1F Market Technician
After moving up at the open, the Market quickly retreated to lows by late morning. The PM session was all to the upside, with the S&P and DJIA closing with moderate gains of between 1 and 1.3%. The Nasdaq100 still feeling the hangover from AAPL, was down 1 point at the close. The DJIA and S&P closed above their 50% retracement levels and technicals continued to look positive. RSI’s are near 60 and ROC(10)’s are positive and rising for all three major indices. The S&P and DJIA are poised to move above their 150 and 200D-SMA’s, which would further support the upside bias. The Nasdaq100 has already surpassed these technical milestones. The Russell 2000 closed at 727, just under the top of its recent trading range which is 728. A follow through by the Russell 2000 would confirm the breakouts of the three major indices. A hold of the 50% retracement levels would suggest that we retest the April and July highs. Look for the S&P to find some resistance in the 1263 to 1275 area, as I don’t see a direct move back to the highs. Expect to see the DJIA find some resistance at the 11965 to 12000 area. The VIX came off 7.3% in yesterday’s session to close just below 30. While this is encouraging, we still see the VIX at lofty levels and volatility still present within the market place. Early futures point to a strong opening to the upside on the European headlines. Watch the 1242 level in the S&P today for near term strength to the upside.
Major Economic Reports TodayInitial/Continuing Claims-8:30am GDP-8:30am Pending Home Sales-10:00am
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