David Chojnacki - Market Technician
Better than expected Housing numbers pushed the markets to the upside, but the momentum was not strong and the NDX and S&P could not carry their gains into the close. The DJIA did eke out a gain of 13.5 points and closed with a new high. The S&P traded in new high territory briefly during the session, but closed with a small loss. At the close, the DJIA added 13.5 points, the S&P slipped 1.37 points, and the NDX fell 9.2 points. Breadth was negative, 1.6 to 1, on below average volume. RSI's were mixed in the session with the DJIA inching up to 60.3, the strongest of the major indices. ROC(10's) advanced in the session. MACD's remain above signal. The ARMS finished at 1.05, reflecting the little change we saw in prices yesterday. The DJIA closed at a new high of 18312 and traded intra-day as high as 18351. Unfortunately, the other major indices could muster the same strength. All three major averages developed andlesticks that indicate a topping or reversal formation. The S&P held above 2125 which is important support to continue to new highs and confirm the recent breakout. Over the last few months the averages have moved to new highs, only to pull back and then trade sideways before mustering the strength to make another high. This slow slog to the upside may continue until we get confirming breakouts either to the downside or the upside. For now, technicals continue to be positive in all timeframes and we see this pattern continuing. The DJT fell in yesterday's session to once again move below its 200D-SMA. It continues to be the weakest of the major averages. The VIX added 2.8% to finish at 12.73. Near term support for the S&P remains at 2125 and 2117. Upside resistance near term is at 2137, 2140 and 2150. The NDX near term support remains at 4500 and 4475. Upside resistance is at 4525 and 4536. FOMC minutes today. Europe is mixed in early trade and US Futures are also mixed before the bell.
Major Economic Reports Today
Crude Inventories-10:30am FOMC Minutes-2:00pm
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