Market technician Dave Chojnacki of Street One Financial wraps up the trading week with an update of the important technical levels to watch for the major U.S. averages, as low volume and weak price action continue to define the late-summer action.
Economic numbers were pretty much as expected Thursday morning, however, a weak Existing Home Sales helped to keep equities lower. It was the same old story, with the major indices trading in a narrow range on below average volume.
The Jackson Hole meeting kicked off yesterday, but we haven’t seen any leaks as of yet. We have Fed chair Janet Yellen speaking today, so perhaps we get a spark for the major averages.
Speaking of which, the major indices met resistance at technical levels and ended the day little changed, but with small losses. At the close, the Dow Jones Industrial Average was off 28.6 points, the S&P 500 slipped 5 points, and the Nasdaq 100 gave up 17.3 points.
Breadth was slightly positive, on below average volume. ROC(10)s advanced, with the NDX and SPX crossing back into positive territory. The DJIA remained in negative territory. RSI’s were somewhat lower, with the DJIA still leading at 49.1. The NDX ended at 48.1 and the SPX closed at 44.5. MACD’s remain below signal for all three major indices. The ARMS index ended the day at 1.06. a neutral reading.
It was another lethargic session, where the major averages were not able to get above key near term technical levels and turn the near term bias back to the upside. The averages hit some key resistance levels during the session and pulled back. The DJIA and NDX traded just near their 20D-SMA’s and reversed. The 20D-SMA’s for the DJIA and NDX are at 21920 and 5872, respectively. The high of the day for the DJIA was at 21870 and 5871 for the NDX. The SPX met resistance at its 50-D SMA of 2450. It remains below its trend-line that it broke a few sessions ago. That trend-line now sits at 2456. The SPX 20-D SMA is at 2458.
The VIX was little changed, off .03 to finish at 12.22.
Near term support for the NDX is at 5825 and 5814. Near term resistance is at 5850 and 5872. Near term support for the SPX is at 2437 and 2425. Near term resistance is at 2450 and 2458.
Europe is slightly higher in early trade, and U.S. Futures are pointing higher in the premarket. Without any major economic reports on tap today, all eyes will be on the Fed to help determine the market’s direction.
The SPDR Dow Jones Industrial Average (NYSE:DIA) ETF was unchanged in premarket trading Friday. Year-to-date, DIA has gained 11.46%, versus a 10.16% 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.