Dow Jones Gets Back To Its Winning Ways

Technical analyst Dave Chojnacki of Street One Financial wraps up the trading week with a deep dive into the underlying technical indicators for the U.S. averages, which look to close an up-and-down week on a high note.

After the late day FOMC sell-off in the prior session, equities opened to the upside on Thursday. Good economic reports helped propel the major indices to good gains through the morning hours.

The afternoon session completely reversed direction again, however, as equities fell into the close. There didn’t appear to be any news to impact the market, however, the S&P 500 (SPX) was nearing technical resistance levels (20- and 50-day averages), which may have acted as temporary wall.

By the final bell, the major indices held on to minor gains, with the Dow Jones Industrial Average (DJIA) having the strongest session. At the close, the DJIA added 0.66%, the SPX inched up 2.6 points, and the Nasdaq 100 (NDX) was up 2.5 points. Breadth was slightly positive, on below average volume. ROC(10)’s advanced in the session, pushing the DJIA into positive territory. The NDX and SPX remained in positive territory.

RSI’s moved higher, with the NDX leading at 53.7. The DJIA ended at 47.5 and the SPX at 47.2. The NDX MACD remains above signal, while the DJIA and SPX continue below. The ARMS index ended the day at 0.88, a slightly bullish reading.

On the plus side, the DJIA and SPX ended a two day losing streak. The DJIA closed the day at 24962, remaining below the 50% retrace level of 25238. It also continues below its 50D-SMA of 25211.

The SPX closed at 2703, after meeting resistance at its 20 and 50D moving averages of 2731 and 2729, respectively, earlier in the session. The SPX remained below its 50% retrace level of 2726. It did close just above its 38% retrace level of 2692.

The NDX ended at 6761, remaining the strongest index near term. It continues above its 20 and 50D-SMA’s of 6727 and 6649, respectively. Meanwhile, the VIX fell for the second straight session, moving down 6.5% to finish at 18.72.

Near term support for the NDX is at 6727 and 6700. Near term resistance is at 6800 and 6850. Near term support for the SPX is at 2692 and 2675. Near term resistance is at 2729, 2731 and 2737.

Europe is mixed in early trade Friday, while U.S. Futures are significantly higher in the premarket. There are no major economic reports scheduled for today.

The SPDR Dow Jones Industrial Average (SI:SPDR) ETF (DIA) rose $1.91 (+0.77%) in premarket trading Friday. Year-to-date, DIA has gained 0.85%, versus a 1.33% 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 #1 of 79 ETFs in the Large Cap Value ETFs category.