David Chojnacki S1F Market Technician
In the last two weeks, we have seen the S&P make a 4% move to the upside and then retrace most of that move, to close yesterday at nearly the same level as two weeks ago. Since May 18th, except for two brief exceptions, the S&P has traded in a range between 1295 and 1335. Yesterday's action displayed some strength in the afternoon, to move the major indices to the upside at the close. At the close, the DJIA was up 0.26%, the S&P gaining .48%, and the Nasdaq100 adding .6%. Breadth was positive 1.7 to 1, on below average volume. RSI's remain within a point of each other for all three indices, settling near the upper 40's. ROC(10's) moved to the positive side in yesterday's session and are rising. Since the bounce off the lows of June 4th, the averages have exhibited near and short term strength, and currently some weakness in the near term. All the indices are above their 200D-SMA and are holding the longer term positive bias, though it has been threatened. The DJIA and S&P remain below their 150D-SMA's, causing some concern for longer term strength. The Nasdaq100, however, has been bouncing off the 150D level on several occasions. This Market has been driven by headlines, but as noted remains in a range. We expect this range to continue as long as we hold the longer term technical levels. For the S&P, the range may extend from 1295 to 1363, roughly about 5%. The Nasdaq100 is developing a range between 2450 and 2625. The Fibonacci 38% retracement level is 1319 and 2541 for the S&P and Nasdaq100 respectively. Above these levels we see the short term bias to the upside. Below these levels, the bias is neutral, down to the longer term support at the 200D-SMA levels. The VIX is just below 20 at 19.72, suggesting that some of the volatility in the Market has been removed. Futures flat this AM.
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