Market technician Dave Chojnacki of StreetOne Technical Analysis wraps up the trading week with an update on the underlying technicals for the major U.S. averages, which continue to consolidate recent gains.
Good economic reports pushed equities higher early in the session Thursday. Claims Numbers and Philly Fed came in with bullish readings. The major indices moved higher till late morning, when they began to reverse. Once again, Techs were weak and pulling back on the NASDAQ 100.
The overall market was doing better, as we saw the iShares Russell 2000 (NYSE:IWM) move to a new high for the second straight session. It gained 0.46% to finish at 161.66. The major indices were hampered by interest rate fears, as the 10-year inched higher to end the day at 3.11%. By the final bell, all three major indices ended in the red.
At the close, the Dow Jones Industrial Average (Dow) slipped 0.22%, the S&P 500 (SPX) inched down just 2.3 points, and the NDX fell 0.41%. Breadth was slightly positive, 1.2 to 1, on below average volume. ROC(10)’s declined in the session, however, all three major indices remained in positive territory.
RSI’s moved a little lower, with the NDX continuing to be the strongest at 58. The Dow is now at 55.9 and the SPX at 58.4. All three major averages continue with their MACD above signal. The ARMS index ended the day at 0.98, a neutral reading.
It was a bit of a lackluster session, however, we saw the Dow fall back in the red for the year. It closed at 24713, just below the 2017 close of 24719. The Dow continues to remain below the 50% retrace level of 25074. It continues well above its 50D-SMA of 24420.
The SPX closed at 2720, continuing below its 50% retrace level of 2726. We did see the 20D-SMA(2678) rise to the level of the 50D-SMA(2678), nearing a cross above. The NDX ended the day at 6901, after trading as high as 6952 in the session. It remains comfortably above its 20D-SMA of 6756.
While we have gotten a good bounce off the lows, the Dow and SPX are having a hard time reversing short term bias to the upside. They remain consolidating for the last several sessions. The VIX added 0.07% to finish at 13.43.
Near term support for the NDX is at 6900 and 6852. Near term resistance is at 7000 and 7131. Near term support for the SPX is at 2700 and 2678. Near term critical resistance is at 2726 and 2750.
Europe is mixed in early trade Friday, while U.S. Futures are pointing higher in the premarket. There are no major economic reports on tap today.
The SPDR Dow Jones Industrial Average EFT (NYSE:DIA) fell $0.18 (-0.07%) in premarket trading Friday. Year-to-date, DIA has gained 0.15%, versus a 1.93% 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.