Market technician Dave Chojnacki of Street One Financial recaps Wednesday’s bullish session and updates the important technical indicators for the U.S. averages, which are improving on a daily basis.
The Market opened higher on Wednesday, as economic reports came in as expected. Any fears from the US walking away from the Iran deal did not manifest themselves in equities. We did see energy prices move higher, but they have been moving to the upside for some time now.
Crude oil hit its highest price in 3 ½ years. The Materials sector and Financials were also strong in the session. The Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) pushed through another technical milestone, as they ended with moderate gains. The Tech sector pushed the Nasdaq 100 (NDX) to significant gains, as it continues to be the best performer near term.
At the close, the DJIA gained 0.75%, the SPX added 0.97%, and the NDX was up 1.1%. Breadth was positive, 1.5 to 1, on light volume. ROC(10)’s advanced in the session, with all three major indices in positive territory.
RSI’s moved higher, with the NDX leading the way at 61.1. The DJIA is now at 54.8 and the SPX at 56.6. All three major averages continue with their MACD above signal. The ARMS index ended the day at 0.84, a slightly bullish reading. 2 days ago we had the NDX push through its 50D-SMA and its 50% retrace of 6760.
In Wednesday’s session, the DJIA and SPX moved through their 50D-SMA’s of 24422 and 2676, respectively. They are poised to move through their 50% retrace levels of DJIA(25074) and SPX(2726). Near term and short term technical strength continues to build. The NDX closed at 6893 and is now within striking distance of its March closing high of 7131.
The DJIA closed at 24542, pushing through its 50D. It remains below its 50% retrace level of 25074. The SPX ended the day at 2697, and traded as high as 2701. As noted earlier it pushed through its 50D-SMA, but remains below its 50% retrace lev el of 2726. The VIX fell 8.7% to 13.42.
Near term support for the NDX is at 6800 and 6760. Near term resistance is at 7000 and 7050. Near term support for the SPX is at 2676 and 2650. Near term critical resistance is at 2726 and 2750.
Europe is mixed in early trade Thursday, and U.S. Futures are mixed in the premarket as well. Major economic reports on tap today include CPI at 8:30am, Jobless Claims at 8:30am, and EIA NatGas at 10:30am.
The SPDR Dow Jones Industrial Average (SI:SPDR) rose $0.24 (+0.10%) in premarket trading Thursday. Year-to-date, DIA has declined -0.80%, versus a 0.99% 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.