Technical analyst Dave Chojnacki of Street One Financial reviews Monday’s back-and-forth market action and previews Tuesday’s session with an update of the important technical indicators for the major U.S. averages.
With no major economic reports or news to move the markets, equities pushed higher at the open, following through on Friday’s strong session. Tech’s and Financials were the leading sectors in the session, as Tech’s continue to shine again. Apple (NASDAQ:AAPL) closed with a new record high for the second straight session.
The Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) met resistance at their 50D-SMA’s before pulling back. The over-all market reversed shortly after 2PM when Pres. Trump announced he would have his decision on Iran today. It was the third straight positive session for the DJIA. All three major indices finished in the black, despite the late day sell-off.
At the close, the DJIA was up 0.3%, the SPX gained 0.35%, and the Nasdaq 100 (NDX) added 0.78%. Breadth was positive, 1.8 to 1, on weak volume. ROC(10)’s advanced in the session, with the SPX joining the NDX in positive territory. The DJIA remains in negative territory.
RSI’s moved higher, with the NDX leading the way at 58. The DJIA is now at 51.1 and the SPX at 52.1. The SPX and DJIA MACD’s crossed above signal, joining the NDX. This is another signal that equities may be building strength near term. The ARMS index ended the day at 1.10, a nearly neutral reading. It was another strong session for equities, despite the late day pullback. Volume was once again missing. The NDX closed above its 50% retracement level of 6760, pushing its short term bias to the upside.
The NDX ended at 6821, with the next critical resistance at 6856. The DJIA closed at 24359, above its 20D-SMA of 24330. It remains below its 50D-SMA of 24466 and its 50% retrace level of 25074. The SPX ended the day at 2672, holding its 20D-SMA. It tested its 50D-SMA (2679) in the session, but pulled below. The VIX slipped 0.14% to 14.75.
Near term support for the NDX is at 6750 and 6735. Near term resistance is at 6856 and 7000. Near term support for the SPX is at 2663 and 2615. Near term critical resistance is at 2679 and 2726.
Europe is lower in early trade Tuesday, and U.S. Futures are pointing lower premarket as well. The only major economic report on tap today is JOLTS Jobs Openings at 10:00am.
The SPDR Dow Jones Industrial Average (SI:SPDR) fell $0.82 (-0.34%) in premarket trading Tuesday. Year-to-date, DIA has declined -1.60%, versus a 0.02% 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.