Market technician Dave Chojnacki of StreetOne Technical Analysis wraps up the trading week with a recap of Thursday’s action and previews Friday’s session with a deep dive into the markets’ underlying technicals.
Before the bell on Thursday, we got good Initial Claims Numbers and the CPI came in as expected. This set the stage for the major indices to open higher. Techs continued their move higher and helped the NDX to outperform the other major indices. During the afternoon hours prices were relatively stable, but the DJI and the SPX were able to eke out moderate gains. The DJI finished at its highest level since the end of January, but below the January record high. The 10 year ended the day at 2.96, remaining below the 3% level.
At the close on Thursday, the DJI added 0.57%, the SPX gained 0.53%, and the NDX, the big winner, up 0.98%. Breadth was slightly positive, 1.2 to 1, on average volume. ROC(10)’s were mixed, with the DJI advancing and crossing into positive territory. The NDX and SPX declined and remained in negative territory. RSI’s advanced in the session, with the DJI continuing to be the strongest at 65.6. The NDX is now at 57.7 and the SPX finished at 63.9. All three major indices remain with their MACD’s below signal. The ARMS index ended the day at 1.08, a nearly neutral reading.
The SPX closed higher for the fourth straight session, while the DJI has now been up the last three. The NDX has been higher the last 3 out of 4 sessions. MACD’s remain below signal, which is cautionary, but they remain above their 20D-SMA’s. As we noted the NDX had the best day and closed at 7561. It is comfortably above its 20D-SMA of 7498. Its 50D-SMA sits at 7411. The DJI closed at 26145, nearly 500 points below its January record high. The DJIA is the only index of the big three to not make a new high recently. It closed above its 20D-SMA of 25899.
The SPX finished back above the 2900 level, closing at 2904. It held above its 20D-SMA of 2880. It has additional near term support at its 50D-SMA of 2840. It is now just 12 points below its intraday record high of 2916. The VIX fell 5.8% to 12.37.
Near term support for the NDX is at 7498 and 7400. Near term resistance is at 7600 and 7660. Near term support for the SPX is at 2900 and 2888. Near term resistance is at 2914-16 and 2925.
Europe is higher in early trade Friday, while U.S. Futures are slightly higher in the premarket. We’ll see several economic reports out today, including Retail Sales at 8:30am, Import prices at 8:30am, Industrial Prod. and Capacity at 9:15am, and Consumer Sentiment at 10:00am.
The SPDR Dow Jones Industrial Average (NYSE:DIA) rose $0.44 (+0.17%) in premarket trading Friday. Year-to-date, DIA has gained 6.70%, versus a 9.42% 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 82 ETFs in the Large Cap Value ETFs category.