Technical analyst Dave Chojnacki of Street One Financial recaps Wednesday’s mixed market action and updates the technical indicators for the U.S. averages, which continued to sit in a tight but choppy range here in early spring.
The market opened lower on Wednesday, following through on the prior session’s weakness. A good earnings report by TWTR and a run-up pre-market could not save equities. The 10yr. continued to climb, and took the blame for the major indices moving lower.
Equities quickly moved off their lows as the Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) stopped just short of their 200D-SMA’s. Twitter Inc (NYSE:TWTR) moved into negative territory and carried Techs with it.
In contrast, Boeing (NYSE:BA) had a good day, after earnings, and helped the DJIA to be the strongest index for the day. The major indices ended the session little changed and mixed. At the close, the DJIA added 0.25%, the SPX inched up 4.8 points, and the NDX slipped 4.8 points. Breadth was negative, 1.3 to 1, on average volume. ROC(10)’s advanced in the session, but remained in negative territory.
RSI’s inched higher in the session, with the SPX the strongest at 45.1. The DJIA ended at 44.4 and the NDX at 42.7. The DJIA and NDX had their MACD cross below signal. The SPX remained above signal. The ARMS index ended the day at 0.72, a bullish reading. The major indices continue to trade in a range for the last month or so and in a choppy fashion. The averages have managed to hold above their 200D-SMA’s, which has become the bottom of this range.
On the top end, the indices have struggled to get through the 50% retracement level. Until we break through this range, we are unable to establish a short term bias. The DJIA closed at 24083, below its 20D-SMA of 24277. It continues to hold above its 200D-SMA of 23673. The SPX closed at 2639, holding below its 20D-SMA of 2649. The SPX 200D-SMA is now at 2608 and its 50% retrace level at 2726. The NDX ended at 6513, below its 20D-SMA of 6593, but comfortably above its 200D-SMA of 6348. The VIX fell 1% to 17.84.
Near term support for the NDX is at 6500 and 6348. Near term resistance is at 6593 and 6650. Near term support for the SPX is at 2608 and 2588. Near term critical resistance is at 2649 and 2688.
Europe is slightly higher in early trade Thursday, while U.S. Futures are pointing moderately higher in the premarket. Major economic reports on tap today include Jobless Claims at 8:30am, Durable Goods Orders at 8:30am, and the EIA Natural Gas report at 10:30am.
The SPDR Dow Jones Industrial Average (SI:SPDR) rose $0.98 (+0.41%) in premarket trading Thursday. Year-to-date, DIA has declined -2.70%, versus a -1.21% rise in the benchmark S&P 500 index during the same period.
DIA currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #3 of 81 ETFs in the Large Cap Value ETFs category.