Contributor Since 2009
Major Economic Reports Today
Empire Manufacturing-8:30am NAHB Housing Market Index-10:00am
David Chojnacki, Market Technician
Economic reports on Thursday came in better than expected, but equities were tempered by Geopolitical events. Banks earnings were less than stellar, as most beat on the bottom line, but the top line was disappointing. The major indices were flat till noon, when they then started to the downside and fell through the afternoon hours. The averages ended with their 3rd straight loss in a holiday shortened week. At the close, the DJIA fell 0.67%, the SPX off 0.68%, and the NDX was down 0.44%. ROC(10)'s declined in the session for all three major indices, and they remained in negative territory. RSI's moved lower, with the DJIA and SPX moving in to the 30's. The NDX remains the strongest at 42.7. For the week, the DJIA fell 0.9%, and the SPX and NDX gave up 1.1%. The VIX rose every day last week, ending up 1.2% on Friday to 15.96. For the week, the VIX gained a massive 24%. The VIX is finally beginning to reflect the Geopolitical risks. Earnings reports continue and we get some Housing data this week.
Long term, the upside bias continues, but last week we saw all the major averages moving to the downside. While we remain above key long term technical levels, the major indices are approaching their 20 Week moving averages: DJIA-20260, NDX-5172, SPX-2309. Short term, we had the DJIA and SPX breaking below their 20 and 50D moving averages during the week. DJIA-20D-20668, 50D-20655, SPX- 20D-2354, 50D-2351. They continue above their 50% retracement levels, but short term upside bias is now being challenged. Near term, the bias is turning to the downside. The NDX fell below its 20D-SMA of 5400. RSI's and MACD's continue weak near term for all 3 major indices. Critical near term support: DJIA-20412, SPX-2322, NDX-5316. Europe is lower in early trade. US Futures are slightly lower.
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