Contributor Since 2009
David Chojnacki - Market Technician
Over the weekend China reported on its Reserves and more noise about trouble with Banks in Europe. However, the big kicker was the AFC team winning the Super Bowl, setting up equities for a poor year. The major indices were down right from the opening bell and continued on a steady trend to the downside till the final hour. We saw buyers step in the final hour and take the averages off their lows of the session. Were these genuine buyers or traders covering their shorts before the bell? Today's trade may give us more to evaluate. At the close, the DJIA lost 1.1%, the S&P fell 1.4%, and the NDX gave up 1.6%. Breadth was decidedly negative, 4 to 1, on slightly above average volume. RSI's were lower, with the NDX finishing at 31.2, nearing oversold levels. ROC(10's) were mixed , with only the DJIA remaining in positive territory. The DJIA and SPX see their MACD's remain above signal, however, the NDX crossed below. The ARMS Index finished at 1.04, nearly neutral. All three indices remained below their 20D-SMA's and the NDX now has its 50D cross below its 200D, for the 'Death Cross'. The NDX has been the weakest index near term as the large momentum stocks have been hit hard. The SPX traded as low as 1828, but managed to hold above the 1820 and 1812, critical support levels. The last hour push was unable to get the index above 1867, which was near term resistance. It remains below 1912 keeping the near term bias to the downside. The VIX finished up 11.2% to 26. Volatility remains high. Consumer Discretionary and Financials were the weakest sectors in the session. Near term support for the BDX is at 3950 and 3900. Upside resistance is at 3992, 4000 and 4015. Near term support for the S&P is now at 1850, 1820, and 1812. Upside resistance is at 1857, 1867, and 1875. More news on European bank problems, especially Deutsch Bank. China remains closed for the holiday. Europe lower in early trade. US Futures pointing lower before the bell.
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