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Today's Technical Outlook - 6/23/2014

Market Summary

David Chojnacki, Market Technician

The market opened to the upside on Friday, despite Geo-political issues in multiple parts of the world. It was a lackluster session, as the S&P traded in only a four point range for the entire session. By the final bell, the major indices closed with small gains. Volume picked up in the session as it was options expiration. All three major averages closed the session developing candlestick signals which indicate possible trend reversal. At the close on Friday, the DJIA was up 25.6 points, the S&P added 3.3 points, and the Nasdaq100 moving up just 1.8 points. Breadth was positive, on above average volume. RSI's were barely changed with the S&P at 71 and becoming over-bought. ROC(10's) advanced in the session with the DJIA moving back into positive territory. For the week, the DJIA was 1%, the S&P added 1.3% and the Nasdaq100 gained 0.7%. The VIX continues to surprise, as it traded as low as 10.34 last week, the lowest since Feb of 2007. With an increase in event risks all over the world the VIX is incredibly low.

Trading Trends

MAJOR INDICES Short term support and resistance level

DJIA

close 16947

SP500

close 1962

N100

close 3802

16900

16950

1962

1975

3800

3812

16850

17000

1950

1988

3788

3815

16800

17125

1935

2000

3775

3825

16795

17250

1925

2012

3762

3850

16735

17300

1912

2025

3750

3862

16600

 

1900

2037

3737

3875

   

1897

 

3725

3888

   

1888

 

3712

 
           

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TODAY'S DATE, UNLESS OTHERWISE INDICATED

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Major Economic Reports Today

Existing Home Sales-10:00am

Long term trend continues with an upside bias, as the major indices all made new highs last week. The S&P and Nasdaq100 are up 12.6% and 10.5%, respectively, since their Feb closing lows. Short term technicals remain strong and the indices continue comfortably above key technical levels. The S&P is just a few points below the top of its Bollinger band of 1969. Near term, the averages consolidated in the last few sessions and should have the additional strength for more upside. On Friday, however, all the major indices developed reversal candlesticks, so this needs to be watched. Some key economic reports this week, including additional housing data. Geo-political risks will remain in the spotlight. Europe is lower in early trade. U.S. futures are slightly lower pre-market.