David Chojnacki S1F Market Technician
A quick drop at the open, set the tone for the day, as the indices were unable to recover during the remainder of the session. All the gains of the previous session were erased. Once again, Europe and Spain were the highlight of the day. At the close, the DJIA lost 1.2%, the S&P giving up 1.4%, and the Nasdaq100 losing 0.8%. The Nasdaq100, was somewhat buoyed by a strong day in AAPL shares, which were up 1.2%. Breadth was decidedly negative, 6 to 1 on below average volume. This was the second day in a row of low volume. RSI's dipped back into the high 30's, as ROC(10's) declined. The S&P and DJIA developed 'engulfing bear' candles wiping out the prior day's gains. The indices have now traded in a fairly narrow range, after an initial jump last week from an over-sold condition. The S&P, has once again moved below its 150D-SMA(1318), warning of possible additional weakness. MACD's which neared their signal line, pulled away in yesterday's session, leaving short term bias to the downside. The DJIA did hold its 150D-SMA(12570), but just barely. Look for that level to provide near term support along with 12500. Upside resistance is at 12600 and 12715. The S&P dropped below its 150D-SMA and now near term support lies at 1312 and 1300. Resistance to the upside is 1318 and 1320-25 area. The Nasdaq100 traded in a narrow range and held its 150D-SMA(2502). The technical range trade may continue at least till we get through the plethora of economic reports this week. Support is now at 2525 and 2502. Look for resistance at 2550 and 2575. The VIX spiked 14.7% to 24.14, moving above its 150D-SMA. It remains in the 21 to 25 range for 12 days now. Look for Europe and today's economic reports to move the Market. Futures are slightly higher versus fair value in the early going.
Major Economic Reports Today
Challenger Job Cuts-7:30am ADP Report-8:15am Initial/Continuing Claims-8:30am GDP-8:30am Chicago PMI-9:45am Crude Inventories-11:00am
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