David Chojnacki, Market Technician
GDP numbers were weak, but met expectations on Friday morning. Equities slowly moved up at the opening as investors waited for Yellen's words from Jackson Hole. As the transcript of her speech was released, which appeared to be hawkish, equities began to fall. The major indices fell below some key levels and hit their lowest levels in weeks. The last hour saw buyers step in and kept the averages off their lows, and even managed to get the NDX in positive territory. At the close on Friday, the DJIA fell 0.29%, the S&P was down 3.4 points, and the NDX moved up 8.6 points. Breadth was negative, 1.5 to 1, on average volume. RSI's moved lower and have pulled back from over-bought levels. ROC levels moved into negative territory during the week. The ARMS index ended the day on Friday at 1.15, only slightly bearish. For the week, the DJIA and NDX fell 0.8%, and the NDX gave up 0.6%. The VIX added 0.02 to finish at 13.65. For the week, the VIX was up 20%, to bounce off 2 year low levels.
Longer term, the bull market which began in 2009 continues. Long term weekly RSI's were in a downtrend, which began in May of 2013 until they bottomed in August of 2015, since then they have reversed and continue rising. The major averages are comfortably above their 50Wk. moving average. Short term, the bias remains positive. The major indices remain comfortably above 50% retrace levels and short term moving averages. Near term, momentum and volume has fell off a cliff. The major averages have fallen below their 20D-SMA's and MACD's have moved below signal. Near term support: DJIA-18247, SPX-2147, NDX- 4749. We are cautious near term. A plethora of economic reports this week, including Employment. Europe is lower in early trade. US Futures are flat pre-market.
Major Economic Reports Today
Personal Income/Spending-8:30am Core PCE Prices-8:30am
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