David Chojnacki S1F Market Technician
The Market continued its decline from the prior session. An attempt at an early afternoon rally failed and the major indices closed down between 1.1 and 1.5% on the session. Breadth was negative, 2.4 to 1, on below average volume. Near term technicals deteriorated as RSI’s are now in the low to mid 40’s and ROC(10)’s are negative and declining. We saw all three major indices have their MACD drop below signal. The S&P was unable to hold an important 1220-1225 support level and we went all the way down and tested a Fibonacci level at 1208 intra-day before the index found support. The S&P also closed below its 50 and 20D-SMA’s. We see support once again at 1208 and 1200, with resistance at 1220-1225 and 1236. If we continue below the 1220 level, the S&P will probably test the 1170 area. The DJIA closed just below its 20D-SMA(11829), but bounced off its 50D-SMA area, which sits at 11774. Look for 11774 and 11722 to provide near term support, with 11485 an area to be tested if the weakness continues. The Nasdaq100 continued to remain below the neck-line(1175) and continued below major short term moving averages. It also closed below the 50% retracement level of 2244 and we do not see decent support until 2212 and 2200. Look for resistance to be at the 2225 and 2244 levels. The VIX closed up at 26.04, putting it back above its 200D-SMA. A slew of economic data today. Futures are slightly higher this morning versus fair value.
Major Economic Reports Today
Initial/Continuing Claims-8:30am PPI-8:30am Empire Man.-8:30am Current Acct. Balance-8:30am Net Long Term TIC Flows-9:00am Industrial Prod./Capacity Util.-9:15am Phila Fed-10:00am
ALL PRICES NOTED IN THIS PUBLICATION ARE AS OF THE CLOSE ON TRADING PRIOR TO TODAY’S DATE, UNLESS OTHERWISE INDICATED
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