Market technician Dave Chojnacki of StreetOne Technical Analysis kicks off the new trading week with a deep look at the underlying technicals for the major U.S. Averages.
A good Employment Report set the stage for a positive opening on Friday. The major indices moved up through the morning hours, with Techs leading the way. With this being a holiday shortened week, volume was again missing. Equities spent most of the PM hours trending sideways and held on to their earlier gains. The NDX was the best performer on the day while the DJIA was the worst. The SPX ended with a moderate gain on the day. While Trade continues to be a concern, traders put it out of their minds on Friday. The 10YR continues to remain low at 2.83%.
At the close on Friday, the DJIA was up 0.4%, the SPX added 0.85%, and the NDX gained 1.5%. Breadth was decidedly positive, 3 to 1, on weak volume. ROC(10)s advanced in the session, with the SPX crossing into positive territory. The DJIA and NDX remain in negative territory. RSI’s moved higher, with the NDX the strongest at 58. The DJIA finished at 46.9 and the SPX at 56.4. MACD’s remain below signal for all three major indices. The ARMS index ended the day at 0.60, a fairly bullish reading.
The DJIA continues to be the weakest index near and short term. It closed on Friday at 24456, holding above its 200D-SMA of 24364. It continues below its 50D-SMA of 24625. The DJIA is holding above its long term 50Week average of 23990. The NDX continues to be the best performer, closing on Friday at 7207, just 1% below its closing record high. The NDX moved further away from its 20D-SMA of 7150. It is comfortably above its 50Week moving average of 6517.
The SPX closed at 2759, moving above its 20D-SMA of 2750. It moved further from its 50D-SMA of 2723. It continues well above its 50Week moving average of 2642. For the week the DJIA added 0.7%, the SPX moved up 1.5%, and the NDX gained 2.3%. The VIX fell 16.9% to finish at 13.37.
Near term support for the NDX is at 7150 and 7100. Near term resistance is at 7250 and 7280. Near term support for the SPX is at 2750 and 2723. Near term critical resistance is at 2788 and 2800.
Europe is higher in early trade Monday, and US Futures are pointing higher pre-market. The only major economic report due out today is Consumer Credit at 3:00pm.
The SPDR Dow Jones Industrial Average (NYSE:DIA) rose $1.15 (+0.47%) in premarket trading Monday. Year-to-date, DIA has declined -0.30%, versus a 3.62% 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.