David Chojnacki - Market Technician
The market resumed its downside action at the open after investors had an entire weekend to maul over the Brexit impact. The indices traded in a fairly narrow range and came off their lows of the session by the final bell. It was another big loss for all the major indices and once again we had heavy volume on a down day. The NDX had the biggest loss and the major averages fell through some key technical levels. At the close, the DJIA fell 1.5%, the S&P was down 1.8%, and the NDX, the big loser, off nearly 2%. Breadth was negative, 5 to 1, on heavy volume. RSI's were much lower, falling near over-sold levels. The NDX ended the session with its RSI at 29.9. ROC(10)'s declined in the session, with all three major averages remaining in negative territory. All three major indices remain with their MACD's below signal. The ARMS index finished the day at 1.52, fairly bearish. The 2 day sell-off has been orderly, but key near term technicals have been taken out. MACD's are now below signal and the DJIA and SPX fell below their 200D-SMA's. The SPX also fell below the neckline of a head and shoulders pattern and this level is key in maintaining a near term positive bias. We closed more than 30 points below that level. Its 200D is at 2021 and the close was at 2000. It traded as low as 1991 in the session, and sights are now set on 1974 for short term support, which is the 50% retrace level. The DJIA went through its 200D average of 17239. The NDX fell through key chart support of 4282 and closed below its 50% retrace of 4256. IWM, which represents small-caps, has been out- performing the major indices for several weeks, but has now broken below 2 break-out levels of 110 and 115. 108 is now critical support for the ETF. Near term support for the NDX is at 4200 and 4150. Near term resistance is at 4256 and 4282. Near term support for the SPX is at 1991 and 1974. Near term resistance is at 2012 and 2021. Europe is up significantly in early trade. US Futures are pointing significantly higher before the bell.
Major Economic Reports Today
GDP-8:30am Case-Shiller-20-city-9:00am Consumer Confidence-10:00am
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