Market technician Dave Chojnacki of Street One Financial recaps Monday’s bullish stock market action and updates the important technical indicators to watch for the major U.S. averages, as the recent government shutdown draws to a close.
Equities opened the session Monday rather flat, with no major economic news to move the markets. Investors were still dealing with the government shutdown and what impact that may have on the economy.
By late morning, there was news that a resolution to reopen the government was pending. This spurred equities higher across the board. Once again, Techs were leading the way and pushing the Nasdaq 100 (NDX) to new highs. The rally grew as the session wore on, and all three major indices ended the day with new record highs. Also noted that Netflix (NASDAQ:NFLX) posted good earnings after the bell and was up 8.5%.
At the close, the Dow Jones Industrial Average (DJIA) was up 0.55%, the S&P 500 (SPX) gained 0.81%, and the NDX added 1%. Breadth was positive, 1.8 to 1, on average volume. ROC(10)’s were mixed, with the DJIA the only index declining. All three major averages continue in positive territory.
RSI’s moved higher, with the DJIA continuing to lead at 85.0. The SPX finished at 83.2 and the NDX at 82.1. They remain in near term overbought territory. All three MACD’s continue above signal. The ARMS index ended at 0.72, a bullish reading at the close.
The 2018 rally continues with all three major averages recording new record highs. The NDX was the strongest index on the back of big Techs. The NDX closed at 6906, which was also its high of the session. It is slightly below its upper Bollinger Band® of 6931. Its first level of near term support, which is its 20D-SMA, is at 6627.
The DJIA ended at a new record close of 26214 and traded as high as 26215. Its 20D-SMA is now at 25317. The SPX closed at 2832 and traded as high as 2833. Its upper Bollinger Band® is at 2838. Its 20D-SMA is at 2739. The VIX fell 1.9% to 11.05.
Near term support for the NDX is at 6900 and 6875. Near term resistance is at 6925 and 6950. Near term support for the SPX is at 2825 and 2812. Near term resistance is at 2837, 2838 and 2850.
Europe is mixed in early trade Tuesday, while U.S. Futures are also mixed in the pre-market. The only major economic report due out today is the Richmond Fed Manufacturing Index 10:00am, although we’ll see key earnings results from several heavy hitters as well.
The SPDR Dow Jones Industrial Average (SI:SPDR) rose $0.24 (+0.09%) in premarket trading Tuesday. Year-to-date, DIA has gained 5.90%, versus a 5.93% 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.