David Chojnacki S1F Market Technician
After a lackluster open, the ISM numbers at 10:00am gave the Market a boost and pushed the indices toward the recent highs. The DJIA moved to new four year high, as the averages maintained their strength into the noon hour. A gradual sell-off in the PM, left the indices off their highs of the day, but closing in positive territory. At the close, the DJIA was up 0.5% and at a new 4 year high. The S&P gained 7.9 points, and the Nasdaq100 added 3.2 points. RSIs strengthened once again to the upper 50's to 60 area, and ROC(10's) were positive and advancing. The Nasdaq100 finally joined the other two indices with its MACD moving back above signal. The DJIA, however, still sees its 20D-SMA just below its 50D-SMA. This is related to the narrow recent range trade and is only meaningful if it continues to spread further away. This is also reflected in the S&P as its 20D and 50D-SMA are at the same level(1385). The near and short term bias remains to the upside. Fifth waves are typically short in length, but usually robust and quick moving. We look for a confirmation of the DJIA breakout with similar moves in the S&P and Nasdaq100. The DJIA now has support near 13125 and 13042. Holding above 13125 keeps the bias to the upside. Resistance to the upside is now 13250 and 13264. Above 13264, we would be breaking out to new recent highs. The S&P held a key level closing at 1397. We find support here(1397) and at 1388. We now see resistance on the upside at 1412 and 1419(recent high). The Nasdaq100 up a few points, held the key 2725 level, which along with 2712 will remain as support. Resistance is now 2737 and 2750. The VIX continued its slide to 16.60, down 3.2%. Early Futures are slightly lower versus fair value.
Major Economic Reports Today
ADP Employment Change-8:15am Factory Orders-10:00am Crude Inventories-10:30am
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