Market technician Dave Chojnacki of StreetOne Technical Analysis recaps Tuesday’s action and updates the important technicals for the major U.S. averages.
Equities opened lower on Tuesday, as Netflix's (NASDAQ:NFLX) earnings report had some disappointing numbers. New subscribers were much lower than forecast. Economic reports came in as expected, and the major indices started a slow march back into positive territory. It also helped that Chairman Powell’s testimony was slightly ‘dovish’. Despite the NFLX weakness, it didn’t spread to the rest of the Techs. Instead, Amazon.com (NASDAQ:AMZN), Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL) made new highs. The good performance in Techs lead to the Nasdaq 100 (NDX) being the best performer on the day. The Dow Jones Industrial Average and S&P 500 ended the day with small gains. The 10-YR. finished at 2.86%.
At the close on Tuesday, the DJIA added 55.5 points, the SPX was up 0.4%, and the NDX gained 0.63%. Breadth was positive, 1.3 to 1, on below average volume. ROC(10)’s were mixed with the DJIA and SPX moving higher, while the NDX was lower. All three major indices remain in positive territory. RSI’s moved higher, with the NDX in the lead at 66. The SPX finished at 64 and the DJIA at 61.5. All three MACD’s remain above signal. The ARMS index ended the day at 0.87, a slightly bullish reading.
There were several key technical milestones reached in yesterday’s session. The NDX recorded new highs, the SPX closed above the 2800 level, and the DJIA finally closed above its 50% retrace level of 25074. The DJIA closed at 25119, holding above its 50D-SMA of 24735. Its 50D-SMA remains above its 20D-SMA of 24568. The NDX ended at 7403, a new closing high and traded as high as 7419. It remains the strongest of the big three indices. The NDX is comfortably above its 20D-SMA of 7189.
The SPX closed at 2809, and traded as high as 2814. It’s 20D-SMA is at 2755. It remains just 63 points from its record closing high of 2872. The VIX fell 6% to 12.06. It spent some time with an 11 handle on Tuesday. Near term support for the NDX is at 7350 and 7300. Near term resistance is at 7420 and 7450. Near term support for the SPX is at 2788 and 2755. Near term critical resistance is at 2812 and 2825. Europe is higher in early trade. US Futures are mixed pre-market. Major economic reports on tap today include Housing Starts and Building Permits at 8:30am, Powell testimony at 10:00 am and the Beige Book at 2:00pm.
The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) rose $0.14 (+0.06%) in premarket trading Wednesday. Year-to-date, DIA has gained 2.44%, versus a 5.48% 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 82 ETFs in the Large Cap Value ETFs category.