Market technician Dave Chojnacki of StreetOne Technical Analysis kicks off the new trading week with a recap of Friday and last week’s action, along with an update of the major technical levels to watch for the major U.S. averages.
With no major economic reports to lead the market, equities focused on earnings reports and more talk of Trade tariffs. The major indices opened mixed as good 2nd Qtr. numbers from MSFT had it moving higher and lifting Techs.
The Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) opened lower and traded in very narrow range. Afternoon trading saw all the indices moving lower. MSFT finished the day up 1.79%, but it could not keep the Nasdaq 100 (NDX) in the black. The SPX traded in 10 point range for the day as volume also tapered off. By the end of the day, all three major indices were little changed and to the downside.
At the close on Friday, the DJIA slipped 6.3 points, the SPX fell 2.6 points, and the NDX gave up just 2.1 points. Breadth was slightly negative, on below average volume. ROC(10)’s declined in the session, but all three major averages remained in positive territory. RSI’s moved lower with the NDX leading at 60.8. The DJIA ended at 58.3 and the SPX finished at 60. All three MACD’s remain above signal. The ARMS index ended the day at 1.02, a neutral reading at the close.
The indices not only traded in a narrow range on Friday, but they were flat for the week. For the week, the DJIA was down just 9 points, the SPX finished the week where it started (2801), and the NDX fell 0.3%. The DJIA closed at 25028 on Friday, remaining below the all-important 50% retrace level of 25074. It continues above its 50D-SMA of 24277.
The NDX ended at 7350, after trading as high as 7398 in the session. It remains the strongest index, and comfortably above its 50D-SMA of 7123. It made new highs last week of 7403(closing) and intraday of 7419. The SPX closed at 2801, and traded as high as 2809, a very narrow range. It remains above its 20 and 50D-SMA’s of 2762 and 2751, respectively. 2872 is the record closing high for the SPX. The VIX fell 0.01 of a point to finish at 12.18. For the week it was down 1%. Volatility remains relatively low.
Near term support for the NDX is at 7350 and 7300. Near term resistance is at 7403 and 7419. Near term support for the SPX is at 2800 and 2788. Near term critical resistance is at 2812 and 2825.
Europe is lower in early trade Monday, while U.S. Futures are slightly lower in the premarket. Major economic reports on tap today include Chicago Fed at 8:30am and Existing Home Sales at 10:00am.
The SPDR Dow Jones Industrial Average (NYSE:DIA) fell $0.44 (-0.18%) in premarket trading Monday. Year-to-date, DIA has gained 2.08%, versus a 5.22% 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.