Contributor Since 2009
David Chojnacki - Market Technician
Though we received weak economic numbers Monday morning, equities began the day slowing moving to the upside. The rally accelerated as oil prices rose to their highest levels since November of 2015. The major averages moved through some key near term technical levels as AAPL helped move the NDX to the upside. News of Buffet buying $1 billion in AAPL stock helped fuel the bullishness in that stock. By the end of the day, the averages were up significantly, but on weak volume. At the close, the DJIA was up 1%, the S&P added 0.98%, and the NDX moved up 1.2%. Breadth was decidedly positive, 2.4 to 1, on below average volume. RSI's moved to the upside, with the DJIA and NDX in the upper 40's and the SPX ending at 51. ROC(10)'s advanced in the session, however, they remained in negative territory. MACD's remained below signal for all three major averages. The ARMS Index finished the day at 0.65, indicating the strength in the last hour. It was a decent move to the upside, but the volume was not there to add conviction. Furthermore, the major averages remain in a narrow range. There was some positive news with near term technicals, with the DJIA and SPX moving above their 50D-SMA's of 17653 and 2056, respectively. The NDX found resistance near its 20D-SMA of 4398 during the session. It remains below its 200D-SMA of 4408, despite the strong session propelled by AAPL. As noted earlier the SPX closed above its 50D average, but met resistance near its 20D-SMA of 2074. It needs to move above the 2081 level to regains its near term bullish bias. IWM(small-caps) rose 1.2% to get back above the break-out level of 110.00. Near term support for the NDX is at 4350 and 4328. Near term resistance is at 4398 and 4410. Near term support for the SPX is at 2062 and 2050. Near term resistance is at 2075, 2081 and 2100. Europe is mixed in early trade. US Futures are pointing slightly lower before the opening bell.
Major Economic Reports Today
CPI-8:30am Housing Starts/Building Permits-8:30am Industrial Prod./Capacity Util/-9:15am
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