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Today's Technical Outlook - 2/2/2017

Major Economic Reports Today

Existing Home Sales-10:00am

FOMC Minutes-2:00pm

Market Summary

David Chojnacki - Market Technician

The market got off to a strong start Tuesday and never looked back. There was little economic news to move the averages, as pundits claimed it was a continuation of the Trump rally. There was a brief pullback just before noon, but equities resumed their march higher in the PM and continued into the final bell. All three major indices ended the day moderately higher and set new record highs. Volume picked up slightly in the session, something that had been missing last week. At the close, the DJIA added 0.58%, the SPX gained 0.6%, and the NDX moved up 0.49%. Breadth was decidedly positive, 2.3 to 1, on slightly above average volume. ROC(10)'s advanced in the session and remain in positive territory. RSI's moved higher, as the major averages are becoming extremely overbought near term. The major indices all have RSI's in the 80's, with the NDX the leader at 84.1. All three major indices continue with their MACD above signal. The ARMS index ended the day at 0.70, a bullish level. Near term, the major averages are becoming over-extended as indicated by their RSI's and Bollinger Bands. The DJIA closed at 20743, just 8 points below its Bollinger band top of 20751. The NDX and SPX closed a few points outside their Bollinger Band tops of 5347 and 2362, respectively. Yesterday's rally was broad, as indicated by the Breadth and a new high for the IWM(small-caps) at 140.20. The SPX has been up 9 of the last 10 sessions and continues with the upside bias. Our near term targets for the SPX and NDX are 2382 and 5362, respectively. The DJT(Transports) was up 0.38%, but fell short of establishing a new high. The VIX added 0.7% to finish at 11.57. Near term support for the NDX is at 5347, 5325 and 5300. Near term resistance is at 5350 and 5375. Near term support for the SPX is at 2362, 2350 and 2337. Near term resistance is at 2375 and 2382. Europe is mixed in early trade. US Futures are pointing higher in the pre-market.

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