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Today's Technical Outlook - 5/22/2017

Major Economic Reports Today

No major reports scheduled

Market Summary

David Chojnacki, Market Technician

Equities continued to recover on Friday from the Wednesday meltdown. The major averages opened to the upside and moved skyward through the session. In the last hour we saw a bit of a sell-off, but the averages ended with moderate gains. Gold and Bonds also joined the party ending positive on the day. Volume was higher as Options Expiration added to the activity. At the close, the DJIA added 0.69%, the SPX gained 0.68%, and the NDX moving up 0.45%. Breadth was decidedly positive, 3 to 1, on above average volume. RSI's remain bullish, with the NDX the leader at 58.9. For the week, the DJIA was down 0.4%, the SPX falling 0.3%, and the NDX moving lower by 0.6%. This was the second losing week in a row, yet the NDX and SPX set new highs during the week. The VIX was down 17% to 12.04 on Friday. It was up 15.7% for the week. It was a volatile week for the VIX with some violent swings. We will see more Housing data this week, along with the FOMC announcement and GDP.

Trading Trends

Long term, the upside bias continues, with the NDX and SPX making new highs for the second week in a row. This week, we look at the 20 week moving averages: DJIA- 20547, SPX- 2343, NDX- 5355. We note that the DJIA is only 1.2% above its 20WK average and the SPX 1.6% above. Short term, the bias remains to the upside. The averages are comfortably above 50% retracement levels. Near term, we saw some of the over-bought level in the NDX come off, with its RSI now at 58.9. The DJIA and SPX remain little changed over the last 19 days, despite the SPX inching up to new highs. In this time frame the SPX has risen only 7 points. Critical near term support: DJIA- 20379,SPX-2328, NDX-5353. Europe is mixed in early trade and US Futures are slightly higher in the pre-market.

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