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Today's Technical Outlook-3/5/2012

Market Summary

David Chojnacki S1F Market Technician
The Market opened flat on Friday, than began to slowly lose some ground. Buyers in the PM managed to move the indices close to the flat line but unable to move them into positive territory. At the close, the DJIA was down 2.7 points, the S&P off 4.4 points, and the Nasdaq100 losing 1.9 points. Breadth was negative, 2 to 1, on very weak volume. For the week, the S&P gained 0.2%, the Nasdaq100 added 1.4%, and the DJIA lost 5 points. Once again, for the week, the indices traded in a narrow range, but traded in new high territory. RSI's remain strong and near over-bought levels, while ROC(10's) have lowered, indicating the slowing momentum.
MACD's remain below signal, reflecting the side-ways action and slowing momentum. Since mid-December we have had no meaningful corrections, only periods of sideways consolidation which are then met by a brief buying spree. We appear to be in a third wave of a primary up-trend which began in Oct'11. This would indicate that we have more upside, and any correction in the fourth wave appears to be about 4%. The VIX was little changed on Friday closing at 17.29. Resistance for the DJIA is now 13000 and 13125. Support is now at 12916 and 12810. The S&P sees resistance at 1375 and 1388, near term. Support lies at 1363 and 1353.

Trading Trends

David Chojnacki S1F Market Technician

Long term, we continue to trade in new high territory for all three major indices and bias remains to the upside. Short term bias continues to be positive, but a long over-due pullback or consolidation should not be ruled out. Near term technicals strong, but with some divergences, suggesting some consolidation or at least a slowing of momentum. An increase in volatility, and some up/down sessions of 1% or more, are some signals which may portend a meaningful pullback. A few key economic reports this week, highlighted by the Employment Report on Friday. Early Futures are lower versus fair value, pointing to a weak open.

MAJOR INDICESShort term support and resistance level
DJIA

close 12977

SP500

close 1369

N100

close 2641

12956 13000 1365 1375 2637 2645
12916 13042 1363 1388 2625 2650
12840 13125 1357 1400 2612 2662
12810 13250 1353 1412 2600 2675
12724   1343 1425 2588 2688
12700   1325 1437 2582 2700
12648   1317   2575 2712
12600   1312   2562  
    1300      

DISCLAIMER LANGUAGE

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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