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Today's Technical Outlook-6/12/2012

Market Summary

David Chojnacki S1F Market Technician

The week began with the Market continuing last week's strength. The enthusiasm for a healing Spain waned late morning and prices began to slide. In the final two hours the selling accelerated and by the final bell, all three major indices possessed moderate losses. At the close, the DJIA was off 1.1%, the S&P losing 1.2%, and the Nasdaq100 falling 1.6%. Breadth was negative, 4 to 1, on below average volume. RSI's remain in the mid 40's. ROC(10's) went negative again and declined in the session. While we retained some of last week's short term improvement, it's obvious that we are in an area where we are meeting headwinds. While MACD's remained above signal, the averages pulled back below their 20D-SMA's. The DJIA and S&P also dropped back below their 150D-SMA's. The area of the 150D-SMA, which is now 1321 for the S&P provides some formidable resistance. We have Fibonacci retracement (1319) and 1325 chart resistance, two levels where we see selling coming into the Market. The S&P has support now at 1300-1294 and 1288(200D-SMA). The Nasdaq100 held its 150D-SMA(2511), but dropped below the Fibonacci retracement level of 2542. The Nasdaq100 should find support at 2512-11 and 2500. Resistance has now set up as 2525 and 2542. Once again, we have a convergence of technical indicators in a narrow range. This usually means that we will see swings in the near term bias. We may develop a wider trading range over the next couple weeks, until some fundamental event shakes us out of it. The VIX spiked 10.9% to finish at 23.56, remaining in the 21-25 range that we have recently traded in. Futures this morning are slightly higher versus fair value.

Major Economic Reports Today

Export/Import Prices-8:30am Treasury Budget-2:00pm

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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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