David Chojnacki S1F Market Technician
The indices flirted with both sides of the flat line for most of the morning. By mid- afternoon the averages moved to the downside and maintained that momentum into the close. The indices finished the session near their lows of the day. At the close, the DJIA was off 0.5%, the S&P lost 0.57%, and the Nasdaq100 giving up 0.37%. Breadth was negative, 2 to 1, on average volume. Near and short term technicals remain weak. RSI's are close to 30 and near over-sold territory. ROC(10's) continue to be negative and declining. Momentum to the downside has increased and the S&P reached 1328 at one point, which is a 6.4% correction from the early April high(1419). Short term bias remains to the downside and we look for the 1325 and 1320 levels to provide near term support for the S&P. Near term upside resistance is now at 1337 and 1340-43. As long as we remain below 1343, we can see near term pressure to the downside. The 150D-SMA for the S&P resides at 1311. The Nasdaq100 was not as weak as the other two major indices and it traded within a technical range for the session. In yesterday's 'Daily', we noted that support levels for the Nasdaq100 were 2588 and 2575. Yesterday's range for the Nasdaq100 was 2576 to 2589. Look for 2575 and 2550 to provide near term support. Upside resistance is now 2588 and 2600. The DJIA traded as low as 12608, close to the 12600 support level. Below here, we have support at the 150D-SMA which is at 12513. Resistance for the DJIA remains at 12715 and 12810. The VIX traded above 22 for a time, but it closed just below at 21.97. Volatility is creeping back into the Market and can be seen in the spreading of the Bollinger Bands. Futures are slightly higher versus fair value in the early going.
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