Dow Jones Industrial Average Strengthens Versus Other Indexes

Market technician Dave Chojnacki of StreetOne Technical Analysis previews Wednesday’s market action with an update of the major technical levels to watch for the U.S. averages.

Not much in economic news on Tuesday to move equities, however, they opened to the upside. Investors are beginning to focus on 2nd Qtr earnings and they appear to agree with the business friendly choice for SCOTUS.

The Dow Jones Industrial Average (DJIA) continued to lead on Tuesday, as it is making up ground for a couple bad weeks. While Trade is still on everyone’s mind, it didn’t appear to impact the market yesterday. Oil continues to move higher. The DJIA was the best gainer yesterday, with only a slight gain in the Nasdaq 100 (NDX), but enough for a new closing high. The {{166|S&P 500}} (SPX) ended with a moderate gain. Tuesday was the fourth straight session to the upside for the major indices.

At the close on Tuesday, the DJIA added 0.58%, the SPX was up 0.35%, and the NDX up just 6.6 points. Breadth was slightly positive, on light volume. ROC(10)’s advanced in the session, with all three major indices now in positive territory. RSI’s moved higher, with the SPX now taking the lead at 63.4. The NDX finished at 61.9 and the DJIA at 58.7. All three MACD’s have now crossed above signal, indicating the near term strength. The ARMS index ended the day at 0.71, a slightly bullish reading.

The DJIA has been fairly strong in the last four sessions. It is now comfortably above its 20D-SMA of 24615 and 50D-SMA of 24646. As noted above, its MACD has crossed above signal, indicating its recent strength. Part of the DJIA strength has come in the Financials sector. The NDX closed at a new closing high of 7282. It did form a “Doji” candlestick in the session. The NDX is more than 100 points above its 20D-SMA at 7162. The SPX ended the day at 2793 above its 20D-SMA of 2751. It also closed above its 50D-SMA of 2728. The SPX closed above some near term critical resistance of 2791. The VIX fell 0.39% as it remains relatively low at 12.64.

Near term support for the NDX is at 7200 and 7162. Near term resistance is at 7300 and 7309. Near term support for the SPX is at 2788 and 2751. Near term critical resistance is at 2800 and 2812.

Europe is significantly lower in early trade Wednesday, and US Futures are significantly lower in the premarket. Major economic reports on tap today include PPI at 8:30 am and Wholesale Inventories at 10:00 am.

The SPDR Dow Jones Industrial Average (NYSE:DIA) fell $1.72 (-0.69%) in premarket trading Wednesday. Year-to-date, DIA has gained 1.59%, versus a 4.93% 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 81 ETFs in the Large Cap Value ETFs category.