Market technician Dave Chojnacki of StreetOne Technical Analysis recaps last week’s market action and kicks off a new trading week with a deep dive into the market’s underlying technicals.
Good Employment numbers on Friday were unable to push equities higher at the opening bell. A 2.9% increase in wages was the best in 9 years. The major indices did quickly reverse and moved higher through the morning hours, only to reverse and move lower in the PM hours. All three major averages were weaker on the last of the holiday shortened week. At the final bell, the major indices ended with small losses. The NDX was the biggest loser for the week, as Techs were hit across the board. The NDX lost 2.9% for the week. The DIA was down just 0.1% for the week and the SPX gave up 1%. The 10YR ended at 2.94%, moving back into the 90’s.
At the close on Friday, the DJIA gave up 0.31%, the SPX fell 0.22%, and the NDX was down 0.31%. Breadth was decidedly negative, 2 to 1, on slightly above average volume. ROC(10)’s declined for all three major averages, but remained in positive territory. RSI’s declined in the session, with the DJIA the strongest at 59. The NDX is now the lowest at 47 and the SPX sits at 53.6. All three major indices remain with their MACD’s below signal. The ARMS index ended the day at 0.70, a bullish reading at the close.
The NDX has now fallen for the fourth straight session. GOOG, FB and TWTR have been hit hard as they are coming before Congress accused of censorship. The NDX closed on Friday at 7430 below its 20D-SMA of 7478. It is now 230 points below its recent closing record high of 7660. It has near term critical support at its 50D-SMA of 7375. The SPX tested its 20D-SMA for the second session in a row and was able to close just above. It closed at 2871 with its 20D-SMA at 2868. It has additional near term support at its 50D-SMA of 2827. It is 45 points below its recent intraday high of 2916. The VIX was up 1.5% to 14.88. For the week, the VIX added 18%.
Near term support for the NDX is at 7400 and 7375. Near term resistance is at 7478 and 7500. Near term support for the SPX is at 2868 and 2850. Near term resistance is at 2900 and 2914.
Europe is higher in early trade Monday, and US Futures are higher in the premarket. The only major piece of economic news out today is Consumer Credit at 3:00pm.
The SPDR Dow Jones Industrial Average (NYSE:DIA) ETF rose $1.03 (+0.40%) in premarket trading Monday. Year-to-date, DIA has gained 5.79%, versus a 8.20% 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 #4 of 82 ETFs in the Large Cap Value ETFs category.