Market technician Dave Chojnacki of Street One Financial examines Wednesday’s market pullback, which has now sent the Dow to three straight days of losses.
The market opened higher Wednesday, but quickly found itself losing ground. Retail Sales disappointed, but investors continue to be concerned over tariffs. Boeing (NYSE:BA) was specifically hit over tariff concerns, losing 2.4% in the session. It helped pushed the Dow Jones Industrial Average (DJIA) to be the biggest loser on the day.
The major indices fell throughout the session, however, Techs helped to keep the Nasdaq 100 (NDX) from only losing a few points. The S&P 500 (SPX) had moderate losses, but held a critical technical level, the 50D-SMA.
At the close, the DJIA was down 1%, the SPX gave up 0.57%, and the NDX slipped just 5.5 points. Breadth was negative, 1.4 to 1, on average volume. ROC(10)’s advanced in the session, with the DJIA the only index in negative territory.
RSI’s slipped in the session, however, the NDX remained the strongest at 60.2. The DJIA and SPX fell to 45.4 and 52.4, respectively. All three major indices remain with their MACD above signal. The ARMS index ended the day at 1.37, a slightly bearish reading, The DJIA and SPX have now been lower every day this week, while the NDX has been down the last 2 sessions.
The DJIA closed at 24758 and remained below its critical near term moving averages. Its 20D-SMA is at 25018 and its 50D-SMA sits at 25308. It is now back below its 38% retrace level of 24912. The SPX closed at 2749, just 2 points above its 50D-SMA of 2747. Its 20D-SMA is now at 2731. The SPX continues above its 50% retrace level of 2726.
The NDX continues to be the strongest index near term. It closed at 7040, comfortably above its 20D-SMA of 6887. It continues above its 61% retrace level of 6748. IWM (iShares Russell 2000) gave up 0.47%, to close at 157.71. It is just off its record high of 160.30. The VIX added 5.3% to finish at 17.23.
Near term support for the NDX is at 7022 and 7000. Near term resistance is at 7100 and 7124. Near term support for the SPX is at 2747 and 2731. Near term resistance is at 2750 and 2760.
Europe is trading mixed in early trade Thursday, while U.S. Futures are mixed in the premarket. Major economic reports on tap today include Jobless Claims at 8:30am, Philly Fed at 8:30am, Empire State Mfg. at 8:30am, Import/Export Prices at 8:30am, Housing Market Index at 10:00am, and the EIA Nat Gas Report at 10:30am.
The SPDR Dow Jones Industrial Average (SI:SPDR) ETF (DIA) rose $0.32 (+0.13%) in premarket trading Thursday. Year-to-date, DIA has gained 0.20%, versus a 3.16% 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 #1 of 80 ETFs in the Large Cap Value ETFs category.