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Today's Technical Outlook - 8/3/2016

Market Summary

David Chojnacki - Market Technician

Weakness in Europe and poor economic numbers in the US set the stage for an open to the downside. Equities moved lower in the PM hours, and this time the NDX was the leader to the downside. Oil prices continued to put pressure on equities as this helped drag down the DJIA. The major indices found a bottom just after the noon hour and tried to recover into the afternoon hours. A leak about a possible buyout of BIIB, added an extra kick to equities in the final hour and kept them off their lows of the day. The NDX had the biggest loss on the day, as it was somewhat over-bought after reaching new highs the day before. At the close, the DJIA was down 0.49%, the S&P fell 0.64%, and the NDX gave up 0.77%. Breadth was decidedly negative, 3.3 to 1, on above average volume. ROC(10)'s declined, with the SPX joining the DJIA in negative territory. The NDX remains in positive territory. Upside momentum continues to wane. RSI's fell, pulling the NDX back into the upper 60's, with the DJIA and SPX in the lower to mid 50's. The DJIA and SPX remain with their MACD below signal, while the NDX continues above signal. The ARMS index finished the day at 0.85 reflecting the bullishness at the end of the day. All 3 major indices developed 'Hanging man' candles in the session, suggesting a possible near term top. The DJIA fell through its 20D-SMA of 18387. The SPX closed within the 2155-2178 range at 2157, but traded below at 2147 during the session. It closed below 2162 which had been providing good support. 2150 is key near term support. The NDX fell back below its 2015 high of 4739, which points us to watch if the recent breakout may have been false. The VIX spiked up 7.4% to 13.37. Near term support for the NDX is at 4700 and 4675. Near term resistance is at 4739 and 4750. Near term support for the SPX is at 2155 and 2150. Near term resistance is at 2162 and 2175. Europe is down significantly in early trade. US Futures are lower in the pre-market.

Major Economic Reports Today

ADP Employment Change-8:15am ISM Services-10:00am Crude Inv.-10:30am

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