Market technician Dave Chojnacki of Street One Financial recaps an anemic Monday for the U.S. markets and looks ahead to what should be a key late-summer week for the U.S. averages.
Yesterday was one of the last few summer Mondays, and an Eclipse was taking place across America. The market, predictably, reacted in an uneventful fashion and traded in a narrow range.
Volume was weak, and by the end of the session the major averages were little changed. The averages ended mixed, with the Nasdaq 100 (NDX) closing in the red. The Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) eked out a small gain.
At the close, the DJIA added 29.2 points, the SPX inched up 2.8 points, and the NDX gave up just 4.3 points. Breadth was negative by just one point, on weak volume. ROC(10)’s were mixed with the DJIA advancing, and the NDX and SPX declining. All three major averages remain in negative territory.
RSI’s were little changed, with the major indices now in the 40’s and upper 30’s. MACD’s remain below signal for all three major indices. The ARMS index ended the day at 1.12, only slightly bearish.
The only thing we could say about yesterday’s session is that no major move was initiated either direction. It was lethargic and gave us very little technical info on the market. All three major averages traded just near or slightly below their lower Bollinger Bands™. It seemed like they were finding support near that level.
The DJIA closed at 21703, holding above its 50D-SMA of 21630. The NDX and SPX were not as lucky, as they remain below their 50D-SMA’s of 5807 and 2449, respectively. The SPX found support at its 20Week moving average of 2417. It continues below its 20D, however. The key trend-line support was at 2450 and we need to get back above that level to resume the upward trend.
The NDX closed at 5786, just 21 points below its 50D-SMA of 5807. It remains below its 20D-SMA. iShares Russell 2000 (NYSE:IWM) (Russell 2000) continues below its 200D-SMA. Meanwhile, the VIX declined 7.5% to 13.19, proving some recent “short volatility” bets correct.
Near term support for the NDX is at 5775 and 5750. Near term resistance is at 5807 and 5825. Near term support for the SPX is at 2414 and 2405. Near term resistance is at and 2449, 2450 and 2475.
Europe is higher in early trade Tuesday, and U.S. Futures are pointing higher in the premarket as well. On the economic data front today’ we’ll see FHFA numbers at 9:00am and the Richmond FED at 10:00am.
The SPDR Dow Jones Industrial Average (SI:SPDR) ETF rose $0.30 (+0.14%) in premarket trading Tuesday. Year-to-date, DIA has gained 10.99%, versus a 9.67% 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 76 ETFs in the Large Cap Value ETFs category.