David Chojnacki S1F Market Technician
After opening to the upside and trading positive for most of the session, the Market dropped rather quickly after the FOMC announcement. There were no major changes to the FOMC policy, but a weakened Euro is being blamed for the U.S. sell-off. The major averages lost between .5 and 1% on the day. Breadth was negative, 2.4 to 1, on average volume. RSI’s dropped to the upper 40’s for the S&P and Nasdaq100, and to 52 for the DJIA. ROC(10)’s turned negative and are declining. Near term technicals have weakened and we are near the 3% pullback we have anticipated. The S&P closed right at the 1225 level, which along with 1220 are strong support levels. The 20D-SMA sits right at 1224. A drop below these levels and we may be looking at another 4-5% pullback
to 1170. Near term support is now 1220 and 1208. Resistance to the upside is 1236 and 1242. The DJIA closed just below a key Fibonacci level of 11958. It did manage to hold its 200D-SMA of 11943, and is now the only major index above this milestone. Near term support is 11943 and 11856. Upside resistance is now at 12000 and 12125. The Nasdaq100 closed just below its 20D-SMA(2271) and below some key retracement levels. It is also below some key moving averages and susceptible to losing its short term upside bias. It also closed just below a ‘neckline’ at 2275 which portends further weakness. Near term support is at 2244 and 2200. Upside resistance is at 2275 and 2312. The VIX moved inversely to the Market by closing down 1% to 25.41, dropping below its 200D-SMA. Futures are slightly lower this morning versus fair value.
Major Economic Reports TodayExport/Import Prices-8:30am Crude Inv.-10:30am
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