David Chojnacki S1F Market Technician
A very strange Monday, as we had the tale of three different Markets. We had the DJIA gaining 71 points, due to strong Financials and Retail. The S&P traded in a very narrow range, bound by 1365 and 1379, and ending off just 0.69 of a point, unable to hold the 1370 support level. The Nasdaq100, however, lost 1%, in part due to a sell-off in Technical stocks. AAPL for instance lost 4.1%, while GOOG gave up 2.9%. Breadth was slightly positive, 1.3 to 1, on a bit of a pick-up in volume from Friday. While we traded mostly flat for the day, there was a late sell-off which may or may not portend anything for this morning. Near and short term technicals remain weak. RSI's are now in the mid to low 40's and ROC(10's) are negative and declining, (except for an advance in yesterday's DJIA). The DJIA has now met resistance at its 50D-SMA(12998) for the third consecutive day, and has been unable to penetrate. We see resistance to continue at this level and also at 13125. Support lies at 12810 and 12724-710 area. The S&P was unable to hold above its 50D-SMA(1376), nor the key 1370 level. We see resistance right near the 1385-88 level. It sets up, that downside bias exists below 1370, with upside bias above 1385-88 level. Below 1370, we still have the potential to test the 1340-43 area. The Nasdaq100 was weak during the session, but did manage to bounce off its 50D-SMA(2661). Unlike the other two major indices, it has not yet broken that level, however, it was the first time to test that level since gapping through it on Jan. 1, of this year. Look for support at 2661 and 2650. Upside resistance can be found at 2712 and 2775. The VIX closed at 19.55, unchanged. Early Futures are slightly higher versus fair value.
Major Economic Reports Today
Housing Starts-8:30am Industrial Prod./Capacity Util.-9:15am
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