Technical analyst Dave Chojnacki of Street One Financial wraps up the trading week with an important update on the technical levels for the major U.S. averages, which have kicked off a new month in mixed fashion.
The major indices opened flat on Thursday, despite Facebook (NASDAQ:FB) posting good earnings. Economic numbers beat expectations, but equites began to lose ground after details of the new Tax Plan began to leak out.
The averages quickly turned around as investors mauled over the Tax cuts and saw no reason to sell any further. Small businesses and large corporations stand to benefit. The major indices were mostly sideways through the PM hours and ended the day little changed and mixed. The Dow Jones Industrial Average (DJIA) was the only index to gain enough to hit new highs.
At the close, the DJIA was up 0.35%, the S&P 500 (SPX) inched up 0.49 of a point, and the Nasdaq 100 (NDX) gave up 0.2%. Breadth was just slightly negative, on average volume. ROC(10)’s were mixed, with the DJIA and NDX advancing, and the SPX declining. All three remain in positive territory. RSI’s were mixed, with the DJIA and SPX inching higher, at 76.6 and 67.4, respectively. The NDX finished at 69.7.
The DJIA and SPX remain with their MACD below signal. The NDX remains with its MACD above signal. The ARMS index ended at 1.24, a slightly bearish reading.
The DJIA was the only major index to close with a new high of 23516. It also established a new intraday high of 23531. It developed a ‘hanging man’ candlestick in the session, which may signal a temporary top. Its 20D-SMA sits at 23155.
The NDX gave up a few points as Biotechs and Techs were weak. It closed just below its upper Bollinger Band® of 6259. Its 20D-SMA sits at 6119.
The SPX closed at 2579, 5 points below its upper Bollinger band of 2584. Its 20D-SMA is at 2562. All three averages remain comfortably above critical near term support. The VIX fell 2.6% to finish at 9.93, back below the 10 handle.
Near term support for the NDX is at 6225 and 6200. Near term resistance is at 6250, 6275 and 6276. Near term support for the SPX is at 2575, 2562 and 2550. Near term resistance is at 2580-82 and 2588.
Europe is higher in early trade Friday, and U.S. Futures are pointing higher in the premarket. Economic reports on tap for today are numerous, including the Employment Report at 8:30am, International Trade at 8:30am, PMI Services Index at 9:45am, Factory Orders at 10:00am, and ISM Non-Mfg Index at 10:00am.
The SPDR Dow Jones Industrial Average (SI:SPDR) ETF rose $0.22 (+0.09%) in premarket trading Friday. Year-to-date, DIA has gained 20.74%, versus a 16.30% 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 76 ETFs in the Large Cap Value ETFs category.