David Chojnacki S1F Market Technician
After some early weakness, the indices managed to begin moving to the upside and by the closing bell closed in positive territory. The gains were minimal, but they kept the new year rally momentum going. Breadth, however, was slightly negative on very weak volume. ROC(10) weakened a bit, but RSI’s remain near 60 and near and short term technicals continue to suggest an upward bias. All three major indices are now holding their 200D-SMA indicating that we are beginning to see longer term strength build into the Market. The S&P and Nasdaq100 are right near levels where earlier we have pulled back. The DJIA remained above its recent high of 12231, which becomes support along with 12400. Near term resistance is at the top Bollinger Band of 12479 and at 12500. It
remains in a position to test the July ‘11 high of 12724. The S&P closed just below its recent high of 1285 and that continues to provide resistance along with 1288 and 1300. Support remains at 1263 and 1250. A move through 1285 sets the S&P up to test the July closing high of 1353. The Nadssaq100 closed below its recent high of 2343, which remains as near term resistance. Its upper Bollinger Band(2345) and Fibonacci level of 2344 are also converging near the recent high. Look for support at 2325 and 2312. The VIX dropped 3.7% to 22.22 and moved through chart support of 22.50. The Employment Report is tomorrow and should influence trading. Futures are down moderately versus fair value.
Major Economic Reports Today
ADP Employment Change-8:15am Initial/Continuing Claims-8:30am ISM Services-10:00am Crude Inv.-11:00am
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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