Contributor Since 2009
David Chojnacki - Market Technician
After a long weekend, investors were prepared to follow through on last Friday's strong finish and buy equities. There was not much in economic news to move the markets, but oil was catching a bid early in the day. The major indices maintained a steady move to the upside throughout the session, though oil prices reversed their course. By the close, the averages finished at their highs of the day with good gains, however, volume was below average. At the close, the DJIA added 1.4%, the S&P was up 1.6%, and the NDX spiked up 2.1%. Breadth was decidedly positive, 5 to 1, on below average volume. RSI's moved higher and are now in the mid to upper 40's. ROC(10's) advanced , but remain in negative territory. The SPX and the NDX saw their MACD's cross above signal, joining the DJIA. The ARMS Index finished at 0.75, indicating a fairly strong finish, as all three major indices closed at their high of the session. The DJIA and SPX developed 'large bull' candles, while the NDX developed either a 'hammer' or 'hanging man'. It appears that the strength of the last two sessions is attempting to reverse the near term bias to the upside. We are watching 1912 for the SPX and 4250 for the NDX to indicate that reversal. The SPX moved through its 20D-SMA of 1885, but closed 17 points below the 1912 level. The DJIA and NDX remain below their 20D-SMA's of 16081 and 4125, respectively. The bounce off the lows last week started a 2 day rally, however, we have not had the volume to show conviction of those moves. We are still a considerable distance from 1995 in the SPX, which would indicate a reversal of the short term bias. The VIX finished down 5%, to 24.11. Consumer Discretionary and I/T were the two best performing sectors on the day. Near term support for the NDX is at 4100 and 3950. Upside resistance is at 4125 and 4150. Near term support for the S&P is now at 1875, 1867 and 1857. Upside resistance is at 1900 and 1912. Europe is up significantly in early trade. US Futures are higher in the pre-market.
Major Economic Reports Today
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