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Today's Technical Outlook - 8/30/2016

Market Summary

David Chojnacki - Market Technician

The market opened the session higher, reversing the weak session last Friday. The major indices rose until early PM, when they hit their highs and then drifted lower into the close. The DJIA and SPX were the stronger indices in the session, reversing the lead recently by the NDX. Could we possibly be starting to go through another sector rotation? Financials and Materials were the two top sectors in the session. At the close, the DJIA added 0.58%, the SPX was up 0.52%, and the NDX gaining just 7.3 points. Breadth was positive, 2 to 1, on weak volume. ROC(10)'s were mixed in the session, with the NDX the only index declining. All 3 indices remained in negative territory. RSI's moved higher, with the major averages ranging between 53.2 and 60(NDX). All three major indices remain with their MACD below signal. The ARMS index ended at 0.54, moderately bullish. As we approach the end of the month, Equities may have seen some window dressing yesterday. With the major averages within striking distance of their recent highs, and the short term rally, portfolio managers need to be in equities. In our last report, we mentioned the weakness beginning to set in, near term. In yesterday's session, the NDX and SPX moved back above their 20D-SMA's of 4788 and 2178, respectively. The DJIA closed 3 points below its 20D-SMA of 18506. Volume remained weak, but breadth was pretty good. Momentum continues weak as the sideways trade continues. Important near term support levels are: DJIA- 18247, SPX-2147, and NDX-4749. The IWM(small-caps) added 0.53% to finish at 123.70, less than a point away from its recent intra-day high of 124.41. The VIX was down 5.2% to 12.94. Near term support for the NDX is at 4788, 4775 and 4749. Near term resistance is at 4800, 4825, and 4827. Near term support for the SPX is at 2178, 2175, and 2150. Near term resistance is at 2190, 2193 and 2200. Europe is slightly higher in early trade. US Futures are mixed in the pre-market.

Major Economic Reports Today

Case-Shiller Index-9:00am Consumer Confidence-10:00am

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