Market technician Dave Chojnacki of StreetOne Technical Analysis wraps up the trading week with a deep dive into the technicals for the major U.S. averages.
We received mixed economic numbers on Thursday, but investors still had Trade Wars on their mind. The major averages opened mixed, with Techs keeping the NASDAQ 100 (NDX) in the green. The weakness spread into all sectors, as the Supreme Court Online Tax decision was a whammy for some of the Internet retailers. It probably will have little impact on the giants like Amazon.com Inc (NASDAQ:AMZN), but may effect the smaller retailers. It may help some of the brick and mortar crowd.
The major indices continued to fall throughout the day, and the Dow Jones Industrial Average ETF (Dow) was down for the 8th straight session. Losses were moderate to significant across the board at the final bell.
At the close, the Dow was down 0.8%, the S&P 500 (SPX) fell 0.63%, and the NDX lost 0.87%. Breadth was decidedly negative, 2 to 1, on average volume. ROC(10)’s fell across the board, with the Dow and SPX remaining in negative territory. The NDX remains in positive territory. RSI’s fell in the session, with the NDX continuing to lead at 61.6. The Dow was down to 39.3 and the SPX ended at 51.1. The NDX MACD crossed below signal, joining the Dow and SPX. The ARMS index ended the day at 1.13, a slightly bearish reading.
The Dow continues to give up ground, falling for the 8th straight session. The Dow ended the day at 24461, below its 50D-SMA of 24657. Most near and short term technical signals are weak for the Dow. The NDX continues to be the strongest of the indices, hitting new record highs on Wednesday, however, it retraced most of those gains on Thursday. It developed an ‘engulfing bearish’ candlestick in the session. The NDX closed at 7217, holding above its 20D-SMA of 7139. Its near and short term technicals remain strong, except for its MACD falling below signal. The SPX ended the day at 2749, below its 20D-SMA of 2754. It continues to hold its 50% retrace level of 2726, which now becomes critical support. The VIX spiked 14.4% to end at 14.64.
Near term support for the NDX is at 7200 and 7150. Near term resistance is at 7250 and 7309. Near term support for the SPX is at 2726 and 2713. Near term critical resistance is at 2788-89 and 2800.
Europe is significantly higher in early trade Friday, and U.S. Futures are pointing higher in the premarket. The only major piece of economic news on tap today is Manufacturing PMI at 9:45am.
The SPDR Dow Jones Industrial Average (SI:SPDR) ETF (DIA) rose $1.35 (+0.55%) in premarket trading Friday. Year-to-date, DIA has declined -0.34%, versus a 3.18% 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 #3 of 81 ETFs in the Large Cap Value ETFs category.