David Chojnacki, Market Technician
Poor economic numbers, especially Retail Sales, had equities lower at the open. The weakness did not last long, as investors know that poor economic numbers will keep rates low and equities the place to be. By noon, many traders were at the beach and volume fell off a cliff. BY the final bell the major averages ended mixed and little changed, but near their highs of the day. Despite the lethargic trade, the NDX closed with a new high. At the close on Friday, the DJIA fell 37 points, the S&P inched down 1.7 points, and the NDX added 3.7 points. Breadth was slightly negative, on very weak volume. RSI's were little changed with the NDX slightly over-bought at 72.1. The ARMS index ended the day on Friday at 1.11, a neutral reading. The last 6 sessions saw the major averages change very little. For the week, the DJIA ended up 0.1%, the S&P added just 2 points, and the NDX gained 0.3%. The VIX fell 1.1 to 11.55. It was up 0.16 for the week, but remains at extremely low levels.
Longer term, the bias remains to the upside. We saw the major indices make new highs last week, despite the fact that the trading was nearly sideways for the week. Volume for the week has not confirmed the new highs. The NDX is once again the leader, as it has been since 2009. Short term, the action remains positive, however, some of the averages are nearing the top of their Bollinger Bands. They may be extended somewhat at these levels. Near term, we see the last six session consolidation setting up for more upside action. Near term targets for the SPX are 2187 and 2229. This week we get a heavy dose of Housing numbers, which may give more hints as to future rate direction. Europe is slightly higher in early trade. US Futures are slightly higher pre-market.
Major Economic Reports Today
Empire Manufacturing-8:30am NAHB Housing Market Index-10:00am
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