Technical analyst Dave Chojnacki of Street One Financial recaps Wednesday’s dull market action, which marked the second straight day of losses for the major U.S. averages, and updates the important technical levels to watch as we head into the holidays.
More good housing numbers on Wednesday did little to help equities. The major indices got off to a slow start, despite final passage of the Tax Reform. For now, the elation for tax cuts has waned.
The indices traded in negative territory for most of the session. They made several attempts to move into positive territory, but could not hold on to those gains. Volume was missing, as traders may be already getting in to the holiday spirit.
By the end of the session, the major indices were only slightly lower. At the close, the Dow Jones Industrial Average (DJIA) fell 38.1 points, the S&P 500 (SPX) slipped 2.2 points, and the Nasdaq 100 (NDX) gave up 8.1 points.
Breadth was just slightly positive, on below average volume. ROC(10)’s were mixed, with the DJIA advancing and the SPX and NDX declining. All three remain in positive territory.
RSI’s moved slightly lower, with the DJIA continuing to remain the leader at 75.3. The SPX finished at 69.4 and the NDX at 63.8. All three major indices remain with their MACD above signal. The ARMS index ended at 0.85, slightly bullish at the close.
Equities lost ground for the second session in a row. The major indices are consolidating their recent record highs. It was a choppy session, as equities traded in a narrow range. The DJIA closed at 24726 and traded as high as 24852. It remains above its 20D-SMA of 24250.
The NDX closed at 6472, holding below its upper Bollinger Band® of 6517. The NDX remains above its 20D-SMA of 6380. The SPX closed at 2679, as it gave up just 2 points. It remains above its 20D-SMA of 2644.
The VIX finished down 3% to 9.72, and is trading at extremely low levels as we approach end of year.
Near term support for the NDX is at 6450 and 6425. Near term resistance is at 6500 and 6522. Near term support for the SPX is at 2675 and 2650. Near term resistance is at 2694 and 2700. Europe is higher in early trade.
US Futures are pointing slightly higher in premarket Thursday. Major economic reports on tap today include GDP at 8:30am, Jobless Claims at 8:30am, Philly Fed at 8:30am, Leading Indicators at 10:00am, and the EIA Natural Gas report at 10:30am.
The SPDR Dow Jones Industrial Average (SI:SPDR) was unchanged in premarket trading Thursday. Year-to-date, DIA has gained 27.63%, versus a 21.78% 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 80 ETFs in the Large Cap Value ETFs category.