Market technician Dave Chojnacki of StreetOne Technical Analysis wraps up the trading week with a recap of Thursday’s Facebook-fueled pullback for the Nasdaq 100 (NDX) and updates the important technical indicators to consider as we approach the end of July.
The talk yesterday was all about Facebook (NASDAQ:FB). Their forward guidance was poor and the stock was hammered after hours on Wednesday. It ended on Thursday at 176.26, down 18.9%. This hurt the NDX and many other indices that have large positions in the stock.
Naturally, the NDX was the weakest performer of the big three on Thursday. The Dow Jones Industrial Average (Dow) did much better, however, and had modest gain to the upside. Good earnings in MMM, CAT and Boeing (NYSE:BA) propelled the Dow to a modest gain on the day. The S&P 500 (SPX) had a small loss, as FB helped to keep it down. The 10YR ended the day at 2.98%.
At the close on Thursday, the Dow was up 0.44%, the SPX was down 0.3%, and the NDX fell 1.4%. Breadth was positive, 1.5 to 1, on above average volume. ROC(10)’s were mixed, with the Dow advancing and the SPX and NDX declining. RSI’s were also mixed, with the Dow rising to 68.6 and now the leader. The NDX was down to 59.4 and the SPX fell to 66.2. All three MACD’s remain above signal. The ARMS index ended the day at 1.08, a neutral reading at the close.
The NDX was the big mover as noted above and fell to close at 7400. It ended the day developing a “Doji”. The other FANG stocks and Semi’s had a fairly good day and managed to keep the NDX from a large loss. It remains well above its 20D-SMA of 7278. The Dow had the best session closing at 25527. It saw its 20D-SMA(24842) cross back above its 50D-SMA of 24818. It holds above its 50% retrace level of 25074.
The SPX closed at 2837, and traded as high as 2845. It remains within striking distance of its record closing high of 2872. It continues comfortably above its 20D-SMA of 2783. The VIX fell 1.2% to 12.14. Volatility remains relatively low.
Near term support for the NDX is at 7350 and 7300. Near term resistance is at 7450 and 7475. Near term support for the SPX is at 2825 and 2812. Near term critical resistance is at 2850 and 2862.
Europe is higher in early trade Friday, and U.S. Futures are higher in the premarket as well. Major economic reports on tap today include GDP at 8:30am and Consumer Sentiment at 10:00am.
The SPDR Dow Jones Industrial Average (SI:SPDR) ETF (DIA) rose $0.48 (+0.19%) in premarket trading Friday. Year-to-date, DIA has gained 3.99%, versus a 6.60% 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 81 ETFs in the Large Cap Value ETFs category.