Market technician Dave Chojnacki of Street One Financial wraps up the trading week with a deep look at the important technical indicators shaping today’s market action, as all the major U.S. averages sit at or near all-time highs.
Equities were mixed at the open, despite good Claims and Leading Indicator numbers. New Home Sales reported below expectations and kept the major averages in check. The Dow Jones Industrial Average (DJIA) was doing better than the other major indices, as Consumer Discretionary and Health care were two of the better performing sectors.
By the end of the session, the DJIA and the S&P 500 (SPX) closed at new record highs. The Nasdaq 100 (NDX) registered a small loss in the session. At the close, the DJIA was up 0.54%, the SPX inched up 1.7 points, and the NDX slipped by just 3 points. Breadth was negative, 1.2 to 1, on below average volume. ROC(10)’s advanced in the session, and all three major indices remain in positive territory.
RSI’s were mixed, with the DJIA and SPX inching up to 86.7 and 83.2, respectively. The NDX was slightly lower at 76.4. All three remain in near term overbought territory. All three MACD’s continue above signal. The ARMS index ended at 1.12, slightly bearish at the close.
Volume dropped off on Thursday, even as the DJIA made new highs. It closed at 26392 and traded as high as 26458. It remains below its upper Bollinger Band® of 26656. It continues above its 20D-SMA support of 25546.
The SPX closed at 2839.25, making a new high by just a few decimal points. Its 20D-SMA now sits at 2762. The SPX upper Bollinger Band is now at 2870.
The NDX closed slightly lower to 6916 for the second session in a row. Its 20D-SMA is now at 6699. TLT(iShare 20+yr. Treasury Bond ETF) was up 0.82% to close at 124.05. It is in a Head and Shoulders pattern with a neck-line at 122.50. Watch that level for a break lower.
The VIX added 1% to finish at 11.58. It was the third upside session in a row for the volatility indicator.
Near term support for the NDX is at 6900 and 6875. Near term resistance is at 6950 and 7000. Near term support for the SPX is at 2825 and 2812. Near term resistance is at 2850 and 2862.
Europe is higher in early trade Friday, and U.S. Futures are also pointing higher in the premarket. Major economic reports on tap today include Durable Goods Orders at 8:30am, GDP at 8:30am, International Trade in Goods at 8:30am, and Retail/Wholesale Inventories also at 8:30am.
The SPDR Dow Jones Industrial Average (SI:SPDR) ETF rose $0.85 (+0.32%) in premarket trading Friday. Year-to-date, DIA has gained 6.62%, versus a 6.16% 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 79 ETFs in the Large Cap Value ETFs category.