Today's Technical Outlook - 1/19/2016
Growth
Contributor Since 2009
Market Summary
David Chojnacki, Market Technician
The market gapped down at the open on Friday after bouncing to the upside in the prior session. The S&P was down nearly 2% in the first five minutes. Shortly after the noon hour the major indices hit their lows of the session. With it being options expiration volume was heavy. The averages closed with significant losses, but off their lows as we saw some buying in the PM. At the close on Friday, the DJIA was off 2.4%, the S&P was down 2.1%, and the NDX gave up 3%. Breadth was decidedly negative, 5 to 1, on heavy volume. RSI's fell and ended right near 30, heading towards over-sold territory. For the week, the DJIA and S&P were down 2.1%, and the NDX falling 3%. Year to date, the averages are down between 7.9% and 9.8%. It is one of the worst starts to a new year. The VIX was up 12.8%, to finish at 27.02. Volatility remains high. Energy and I/T were the weakest sectors in the day. IWM (small-caps) continues to outpace the major indices to the downside, off 3.5% for the week.
Trading Trends
MAJOR INDICES Short term support and resistance level | |||||
|
DJIA close 15988 |
SP500 close 1880 |
N100 close 4141 |
|||
15871 |
16000 |
1871 |
1888 |
4125 |
4200 |
15842 |
16250 |
1867 |
1900 |
4100 |
4250 |
15756 |
16500 |
1857 |
1912 |
4085 |
4300 |
15500 |
16800 |
1850 |
1925 |
4083 |
4350 |
15370 |
17000 |
1825 |
1937 |
4053 |
4401 |
15000 |
17011 |
1820 |
1950 |
4016 |
4425 |
1800 |
1975 |
4000 |
4450 |
||
1780 |
1995 |
3900 |
4464 |
||
2000 |
3787 |
||||
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TODAY'S DATE, UNLESS OTHERWISE INDICATED
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Major Economic Reports Today
No reports scheduled
The longer term trend lines have been broken and we would need to retest the earlier highs of 2015 to re-establish those trends. We don't see this happening in the near term as short term support has also been broken. The S&P broke the August intra-day low of 1867 on Friday, getting down to 1857. It did close above by the final bell. The NDX and the DJIA did not trade below their August lows, which are 3787 and 15370, respectively. Short term resistance will be at the 50% retracement levels of 4401 and 1995 for the NDX and S&P, respectively. Near term, Fridays close above the SPX August low may precipitate some buying, however, volatility continues high. We get more Earnings reports this week. Europe is up strong in early trade and US Futures are up significantly.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.