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Today's Technical Outlook-4/30/2012

Market Summary

David Chojnacki S1F Market Technician

After moving up at the open, the Market tried to sell off, however, buyers stepped in to continue the reversal started earlier in the week. At the close on Friday, the DJIA was up 23.6 points, the S&P gained just 3.3 points, and the Nasdaq100 added 16 points. Breadth was positive, 2 to 1, on below average volume. For the week, the S&P gained 1.8%, the DJIA adding 1.5%, and the Nasdaq100 a healthy gain of 2.4%. The volume on the week's upside move was a little weak, leaving some suspicion as to the conviction of the reversal. Near term technicals have improved, with RSI's moving back into the upper 50's, and ROC(10's) are positive and strengthening. We have seen the 20D-SMA's turn to the downside. As the indices reversed to the upside, they have moved through the short term moving averages increasing the short term technical strength. MACD's for the DJIA and S&P, have moved back above signal, with the Nasdaq100 rising but still lagging below. We broke through the recent sideways trade, indicating that we want to go back and test the early April highs. This week's reversal may be the beginning of the fifth wave motive move. Should we break through the April highs, we see some resistance near 1440, but a target of 1475 for the S&P. The Nasdaq100, which has been the leader since the 2009 bottom, may test the 2925 level.

Trading Trends

David Chojnacki S1F Market Technician

Long term, upside bias remains intact for all three major indices. Short term, technicals reversed this week, moving the bias to the upside. Technicals improved dramatically, however, volume did not confirm the conviction to the upside. After breaking out of the recent sideways trade, indications are that we are beginning a fifth motive wave in the rally which began in Oct.11. Near term we should see the strength of last week continuing, with daily reactions to earnings and economic news this week. We have the Employment Report at the end of the week, which will be key. Early Futures are slightly lower versus fair value, indicating some weakness at the open.

MAJOR INDICESShort term support and resistance level
DJIA

close 13228

SP500

close 1403

N100

close 2741

13125 13250 1400 1412 2737 2750
13036 13264 1397 1419 2725 2775
13031 13300 1388 1425 2718 2784
13000 13400 1387 1437 2712 2788
12810 13500 1383 1440 2700 2800
12724 13625 1375 1450 2688 2812
12715   1363 1475 2675 2825
    1358 1500 2662  
    1353      

Major Economic Reports Today

Personal Income/Spending-8:30am PCE Prices-8:30am Chicago PMI-9:45am

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ALL PRICES NOTED IN THIS PUBLICATION ARE AS OF THE CLOSE ON TRADING PRIOR TO TODAY'S DATE, UNLESS OTHERWISE INDICATED

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