3-Day Losing Streak Leaves The Dow Jones The Weakest Among Majors

Technical analyst Dave Chojnacki of Street One Financial wraps up the trading week with a recap of Thursday’s mixed trading action, which snapped a three-day losing streak for the Dow Jones Industrial Average.

Equities moved higher at the open yesterday, as economic reports were in-line or better than expected. A briefing from the White House eased some of the tension over trade tariffs, and the major indices took off to the upside.

The Dow had strong gains, when a New York Times story regarding the Special counsel Robert Mueller investigation and the Trump Organization unnerved the market and reversed its direction. The averages eventually found support after losing a good part of their earlier gains.

By the final bell, the major indices were mixed. The Dow broke its 3 day losing streak and the S&P 500 (SPX) continued lower for the fourth straight session. At the close, the Dow gained 0.47%, the SPX inched down 2.1 points, and the NASDAQ 100 (NDX) slipped 10 points. Breadth was negative, 1.8 to 1, on below average volume. ROC(10)’s advanced in the session, with the Dow moving back into positive territory. The NDX and SPX remain in positive territory.

RSI’s slipped in the session for the NDX and SPX. The NDX remains the strongest at 59.5. The Dow inched up 47.3 and the SPX fell to 52. All three major indices remain with their MACD above signal. The ARMS index ended the day at 1.13, a nearly neutral reading.

As we noted earlier, the Dow broke its 3 day losing streak. It still remains the weakest of the big three indices, however, closing at 24873. It remains below its 20 and 50D-SMA’s of 25017 and 25309, respectively.

The NDX is now down for the last 3 sessions. It closed at 7030 and remains the strongest of the 3 indices near term. It continues well above its 20D-SMA of 6905.

The SPX closed at 2747, just inching below its 50D-SMA of 2748. The SPX continues above its 50% retrace level of 2726 and 20D-SMA of 2734. Meanwhile, IWM (iShares Russell 2000) now down for 3 straight sessions to 156.92. The VIX fell 3.7% to 16.59.

Near term support for the NDX is at 7022 and 7000. Near term resistance is at 7050 and 7100. Near term support for the SPX is at 2747 and 2731. Near term resistance is at 2748, 2750 and 2760.

Europe is trading higher in early trade Friday, and US Futures are slightly higher in the premarket. Major economic reports on tap today include Housing Starts at 8:30am, Industrial Production at 9:15am, Consumer Sentiment at 10:00am, and JOLTS at 10:00am. It’s also Options Expiration day, which can cause some strange movements in the markets.

The SPDR Dow Jones Industrial Average (SI:SPDR) SPDR ETF (DIA) fell $0.06 (-0.02%) in premarket trading Friday. Year-to-date, DIA has gained 0.65%, versus a 3.05% 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 #1 of 80 ETFs in the Large Cap Value ETFs category.