Technical analyst Dave Chojnacki of Street One Financial wraps up the trading week (and trading month) with a deeper look at the renewed bullish push for U.S. equities, updating the important technical levels to watch as we head toward fall.
Wednesday’s break through some key technical levels set the stage for Thursday’s bullish action. Economic reports came in as expected yesterday, and the rally was on.
The major averages moved to the upside from the open and continued a steady rise through the session. Once again, Techs were leading the way and pushing the Nasdaq 100 to be the biggest mover in the session. The NDX actually ended with a new closing high as a result.
Meanwhile, the Dow Jones Industrial Average and S&P 500 both posted moderate gainers on a pick-up in volume. At the close, the DJIA was up 0.25%, the SPX gained 0.57% and the NDX moving up 0.94%. Breadth was decidedly positive, 3 to 1, on above average volume. ROC(10)s advanced, with the DJIA and SPX crossing into positive territory and joining the NDX on that front.
RSIs also moved higher, with the NDX continuing to lead at 63.3. The SPX and DJIA are in the upper 50’s. The SPX MACD crossed above signal, joining the NDX. The DJIA is the only index remaining below signal. The ARMS index ended the day at 0.96, just slightly positive.
Techs and the NDX were the stars again, as the NDX closed at 5988, a new closing high. During the session, it tied its previous intraday high of 5995. It is now comfortably above its 20D-SMA of 5870. It also closed 3 points above its upper Bollinger Band® of 5985.
The DJIA moved above its 20D-SMA of 21900, and now has its eye set on its record closing high of 22118 set in early August. The SPX moved above its Trend-line of 2457, resuming its upside rally. It closed at 2471, comfortably above its 20D-SMA(2453). It closed just 9 points below its all-time closing high of 2480.
GLD (NYSE:GLD) continued its upside move, breaking through 125 and closing at 125.82. The VIX was down 5.6% to 10.59.
Near term support for the NDX is at 5975 and 5950. Near term resistance is at 5995, 6000, and 6025. Near term support for the SPX is at 2457, 2453, and 2450. Near term resistance is at 2480 and 2490.
Europe is higher in early trade Friday, and U.S. Futures are pointing higher in the premarket as well. On the economic data front today, we’ll see the Employment Report at 8:30am, PMI and ISM Manufacturing Index at 9:45am, Construction Spending at 10:00am, and Consumer Sentiment also at 10:00am.
The SPDR Dow Jones Industrial Average (SI:SPDR) ETF (NYSE:DIA) rose $0.55 (+0.25%) in premarket trading Friday. Year-to-date, DIA has gained 12.81%, versus a 11.74% 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 75 ETFs in the Large Cap Value ETFs category.