David Chojnacki - Market Technician
The market opened the session moving to the upside, and by the end of the first hour was up nearly 1%. Some pre-market FED speak was signaling that the economy is still strong enough for a rate hike. Apparently, this somewhat calmed investors from last week's uncertainty and they were back buying equities. After the close of Europe, sellers came in to the market pushing prices back down. They eventually found support and traded choppily into the close with small gains. At the close, the DJIA added 0.77%, the S&P was up 0.46%, and NDX tacked on 0.28%. Breadth was positive, 1.5 to 1, on below average volume. RSI's moved up slightly and remained in the 40's. ROC(10's) advanced and remained in positive territory. MACD's remain above signal for all three major indices. The ARMS Index ended the day at 1.04, nearly neutral. The VIX fell 9.6% to 20.14, barely maintaining the 20 handle. The DJIA and S&P were the strongest in the session and were able to hold on to their 20D support of 16366 and 1952, respectively. We expect this near term choppy action to continue. The S&P needs to move through 1993-96 to regain short term upside bias, while the DJIA has to break through 16669. The NDX needs to move through 4352 to reverse short term bias to the upside. It has not been able to hold through this area or break above its 200D, which sit at 4385. With the NDX closing below 4352 and developing a 'Doji' in the session, we may see some weakness today. Near term support is now at 4329-25 and 4300. Upside resistance is at 4352 and the 200D(4385). Near term support for the S&P is at 1962, 1952, and 1925. Near term upside resistance remains at 1975, 1993-96, and 2000. Financials and I/T were the strongest sectors in the session. The Shanghai was up nearly 1% overnight. Europe is down significantly in early trade. US Futures are down significantly before the bell. Global risk contributing to this morning's weakness.
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