David Chojnacki - Market Technician
With the major indices approaching over-sold levels, bottom fishers were looking for bargains at yesterday's opening bell. Equities quickly reversed and became choppy through the AM hours. By noon, the averages were in positive territory, but then began a slide lower into the close. The major averages ended little changed and mixed at the final bell. At the close, the DJIA gave up 5.8 points, the S&P added 2.9 points, and the Nasdaq100 tacked on 2.4 points. Breadth was positive, 1.6 to 1 on above average volume. RSI's remained fairly steady and in the low 30's for all three major indices. ROC(10's) advanced , but remain comfortably in negative territory. Equities took some time yesterday to digest the recent significant pullback. The DJIA and S&P remain below their 200D-SMA's, while the Nasdaq100 remains above. The Nasdaq100 200D-SMA is now at 3763. We will watch that level for the Nasdaq100 to confirm a larger correction may be taking place. The S&P closed just one point above its 50% Fibonacci level of 1876, representing the range of 1742 to 2011. Holding below that level would indicate further downside bias. The S&P is in a congestion area of 1840-1885, which may provide support and allow for some consolidation. The next critical level of support is 1815. The S&P is now down 6.6% from its recent high. IWM(small-caps) displayed some resilience yesterday, adding 1.1%. The VIX remains in high volatility area, despite a 7.5% pullback to 22.79. Near term support for the S&P is at 1875-76 and 1862. Near term upside resistance is at 1885-88 and 1900-05. Europe is significantly lower in early trade, as sanctions continue to put pressure on their economies. Some key reports today and more bad news on the Ebola scene will keep pressure on equities. Futures little changed before the bell.
Major Economic Reports Today
Retail Sales-8:30am PPI-8:30am Empire Man.-8:30am Business Inv.-10:00am FED's Beige Book-2:00pm
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