David Chojnacki - Market Technician
With little to move the market, equities opened flat yesterday morning. There was not much movement during the session, as the major indices traded in narrow range. It was not until the last hour, when sellers came into the market and sold equities going into the final bell. The selling was broad across all indices in the last hour, but at the close the breadth was slightly positive. The major averages ended the day slightly to the downside. At the close, the DJIA was down 8 points, the S&P slipped 4.2 points, and the NDX fell 7.8 points. Breadth was just slightly positive, on below average volume. RSI's were lower, but remained in the 40's. ROC(10)'s were mixed with the DJIA advancing and the NDX and S&P declining. The NDX remains the only index in positive territory. The recent strength of the NDX has pushed its MACD above signal, while the other two major indices remain below. The ARMS Index finished the day at 1.47, indicating the weakness at the close. It was another narrow trading day with below average volume. The indices closed near their lows of the day. While the near term bias remains weak, the indices have held in a range since the middle of March. The SPX has traded between 2022 and 2111 in that timeframe, less than a 5% range. The indices remain above their 50% retracement levels, keeping their short term bias bullish. The SPX has developed a Head and Shoulders pattern, with a neck-line near 2033. A break would signal a probable test of the 50% retracement level of 1965. The NDX moved back above its 38% retracement level of 4328 and closed just a point above its 20D-SMA of 4354. It remains below its 200D of 4402. The VIX added 4% to finish at 15.82. Near term support for the NDX is at 4350 and 4328. Near term resistance is at 4375 and 4402. Near term support for the SPX is at 2043, 2340, 2033 and 2025. Near term resistance is at 2050 and 2061,62. Europe is significantly higher in early trade. US Futures are higher before the opening bell.
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