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Today's Technical Outlook - 12/7/2015

Market Summary

David Chojnacki, Market Technician

After 2 big down days, the market was enthused by good Job Numbers and Draghi and moved to the upside right from the opening bell. There was some sell-off after the European close, but buyers quickly stepped in and the rally resumed. The major averages held the gains into the close and ended near their highs of the day. At the final bell all three major indices recorded significant gains. At the close on Friday, the DJIA was up 2.1%, the S&P added 2%, and the NDX moved up 2.3%. Breadth was positive, 2 to 1, on above average volume. RSI's spiked higher and are in the fifties. ROC(10) crossed back into positive territory for all 3 major averages, as they developed an 'Engulfing Bull' candle. For the week there was little change, the DJIA added 49 points, the S&P added just 1 point, and NDX was up 0.7%. The VIX gave up a huge 18.2% on Friday to finish at 14.81. It continues to be rather tame given all the geo-political and terrorist incidents throughout the world. Consumer Staples and I/T, strongest sectors for the last 30 days.

Not much change in the last two weeks as the averages have moved sideways. The NDX remains above its 1` yr. trend-line of 4600 and is attempting to test its recent highs. On Wednesday of last week, it traded at a new intra-day high of 2739, but then pulled back to close lower. The S&P remains just below its 1 yr. trend-line of 2105, but it too remains within striking distance of its May highs. Short term it needs to move through 2109 and 2116 before attacking those highs. Critical short term support for the S&P is 1995 and 4401 for the NDX. Near term, the S&P continues to trade in a range it has been in since the end of October(2021 to 2116). We get Retail Sales numbers this week and Geo-political issues remain. Europe is up higher in early trade and US Futures are pointing higher before the bell.

MAJOR INDICES Short term support and resistance level

DJIA

close 17847

SP500

close 2091

N100

close 4716

17750

17918

2076

2100

4700

4719

17697

17977

2075

2109

4675

4725

17580

18000

2064

2112

4647

4737

17447

18120

2056

2116

4625

4750

17361

18250

2050

2125

4600

4775

17325

18312

2041

2130

4575

4800

   

2025

2134

4550

4825

   

2021

2150

4525

 
   

2012

 

4523

 

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Major Economic Reports Today

Consumer Credit-3:00pm

Trading Trends

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.