David Chojnacki - Market Technician
The market opened lower yesterday as equities were ready to digest the recent gains. The averages ended the session little changed and mixed on the day. The S&P broke its string of positive sessions and the NDX and small-caps were the weakest in the session. Once again, the major indices traded within technical ranges. At the close, the DJIA added 13.7 points, the S&P gave up 7.1 points, and the NDX lost 0.57%. Breadth was slightly positive, 1.2 to 1, on below average volume. RSI's were barely changed and remain in the low to mid 50's. ROC(10's) advanced, with the NDX joining the other major indices in positive territory. All three indices remain with their MACD above signal. The ARMS Index finished at 0.82, showing a slight positive bias. After the recent impressive reversal, the major averages took a breather yesterday. Technical signals have improved and the DJIA has moved above its September closing high of 16739. The NDX and SPX lag below those levels, which are 4384 and 1995, respectively. The NDX found support today exactly at its 20D-SMA(4273). It remains below its 50D of 4335. It remains below its 38% retracement level of 4329. It has held its 50% retracement level and is in the process of turning its short term bias to the upside. A move above the September high would confirm. We may see formidable resistance at the 4384 level. The SPX broke its consecutive string of upside sessions, and met resistance just below the 50% retracement level of 1996. Its 50D-SMA is at 1998. IWM was also a big loser in the session, giving up 0.69%. The VIX slipped 0.7%, to finish at 19.40. Near term support for the NDX is at 4300 and 4250. Upside resistance is at 4329, 4352 and 4384. Near term support for the S&P is at 1975, 1962-64, and 1950. Near term upside resistance is now at 1993-96, 2000 and 2012. Geopolitical risk continues, but fear of an imminent rate hike has diminished. Europe is trading up moderately in early trade and US Futures are pointing higher.
Major Economic Reports Today
Crude Inventories-10:30am Consumer Credit-3:00pm
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