Market technician Dave Chojnacki of Street One Financial recaps Wednesday’s sleepy stock market action and updates the key technical levels to focus on for the major U.S. indexes, whose recent rally seems to be waning.
Mixed economic numbers greeted investors on Wednesday morning and they remained in a sort of limbo keeping equities flat in the early going. We got a push to the upside from good ISM numbers late morning, but the major indices couldn’t hold on to those gains and started to retrace.
The major averages moved mostly sideways in the PM and coasted into the close. Volume was the lowest this week, but the Dow Jones Industrial Average and S&P 500 eked out small gains to new highs. At the close, the DJIA added 19.9 points, the SPX gained 3.1 points, and the Nasdaq 100 inched up 3.7 points. Breadth was slightly negative, on below average volume.
ROC(10)’s were mixed with the NDX and SPX advancing, while the DJIA declined. RSI’s moved slightly to the upside with the DJIA and SPX in overbought territory at 76.5 and 74.6, respectively. The NDX finished at 58.6. MACD is above signal for all three major indices. The ARMS index ended at 1.03, a neutral reading.
The DJIA closed at 22661, a record closing high in the session, and traded as high as 22685. As noted earlier, volume was down and did little to add conviction to the move. We saw a slowing of momentum as the DJIA and SPX approached their upper Bollinger Bands®. This recent move seems to be getting a little tired.
The SPX closed at a record 2537 and traded as high as 2540. Its upper Bollinger Band® is at 2539. Its 20D-SMA is at 2502 and its Trend-line at 2500.
The NDX traded at 6009 intra-day, matching its all-time high. It was unable to hold those gains and closed at 5998. Its record closing high remains at 6004. Its 20D-SMA stands at 5960.
iShares Russell 2000 (NYSE:IWM) closed lower, ending its 8 straight record high streak. The VIX was up 1.2% to 9.63. Near term support for the NDX is at 5988 and 5975. Near term resistance is at 6004 and 6009. Near term support for the SPX is at 2525 and 2512. Near term resistance is at 2539 and 2550.
Europe is mixed in early trade Thursday, while U.S. Futures are slightly higher in the premarket. Major economic reports on tap today include International Trade at 8:30am, Jobless Claims at 8:30am, Factory Orders at 10:00am, and the Natural Gas Report at 10:30am.
The SPDR Dow Jones Industrial Average (SI:SPDR) (NYSE:DIA) was unchanged in premarket trading Thursday. Year-to-date, DIA has gained 16.35%, versus a 14.30% 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 75 ETFs in the Large Cap Value ETFs category.