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Today's Technical Outlook-4/20/2012

Market Summary

David Chojnacki S1F Market Technician

Yesterday, we had another session of indecisive activity, in a narrow trading range. Weak afternoon indices got a small lift before the close, minimizing the loss on the day. At the close, the DJIA and S&P were down just over a 0.5%, while the Nasdaq100 finished off 1%. Breadth was negative, 1.5 to 1, on average volume. The three major indices traded within technical levels again, indicating the absence of fundamental money in the Market. RSI's dropped below 50 once again, with ROC(10's) negative, and falling in the session. The indices remain weak both near term and short term. The DJIA fell below its 50D-SMA(13008), and closed below short term averages, demonstrating the continued weakness. Upside resistance is now near 13008 and 13125. Support can now be found at 12810 and 12724. The S&P traded within the area we defined as Limbo, with the index moving up and down through that range(1370-1388) during the session. Below 1370 we see downward pressure, and above 1388 there is upside bias. This time we closed within the range again, and below its 50D-SMA(1379). We look for support at 1370 and 1363. Upside resistance is now at 1379 and 1385-88. The Nasdaq100 traded within a technical range, almost exactly between its 20D and 50D-SMA's. Look for the Nasdaq100 to find support at 2675-72 and 2662. Resistance on the upside is now 2712 and 2725. The VIX gave up 1.5% to close at 18.36, moving countertrend to a down Market. Volatility remains relatively tame. Options expire today and we expect trading volume to increase. Early Futures are slightly higher versus fair value.

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