Technical analyst Dave Chojnacki of Street One Financial recaps Tuesday anemic market action and looks ahead to today’s session, which will likely be very quiet leading up to the Federal Reserve’s meeting at 2:00pm.
Equities were choppy at the open on Tuesday, as investors digested some housing data. The numbers were better than expected, but did little to move the markets. Even a strong speech by President Trump at the U.N. did little to move the averages.
Investors may be waiting for today’s FOMC announcement, in which the Fed probably won’t raise rates, but may give an indication of the wind down of the Fed’s massive balance sheet.
The major indices traded in a narrow range once again yesterday, and finished with small gains. The Dow Jones Industrial Average made new all-time highs and the S&P 500 booked a new closing high. At the close, the DJIA was up 0.18%, the SPX added 0.11%, and the Nasdaq 100 gained 0.17%. Breadth was slightly positive, 1.1 to 1, on slightly below average volume.
ROC(10)s advanced in the session, with the NDX moving back into positive territory. All three major indices are now in positive territory. RSIs inched up with the DJIA moving to 71.1, slightly overbought. The NDX finished at 58.2 and the SPX at 67. All three major averages remain with their MACD above signal. The ARMS index ended the day at 0.99, a neutral reading.
All in all, it was another dull session yesterday, with the DJIA and SPX melting up to new closing highs of 22370 and 2506, respectively. The DJIA also hit a new intraday high of 22386. The SPX fell one point short of its intraday high of 2408. The SPX traded in an extremely narrow range of 2503 to 2507. It remains above its 20D-SMA of 2470. Its upper Bollinger Band® sits at 2515. The SPX developed a ‘Doji’ candlestick in the session.
The NDX has been moving sideways over the last 2 weeks. It remains above its near term moving averages: 20D-5933, 50D-5897. The VIX was up 0.03 of a point, to finish at 10.18.
Near term support for the NDX is at 5988 and 5975. Near term resistance is at 6000, 6004, and 6009. Near term support for the SPX is at 2500 and 2470. Near term resistance is at 2508, 2512 and 2525.
Europe is mixed in early trade Wednesday, while U.S. Futures are slightly higher in the premarket. Economic reports on tap today include Existing Home Sales at 10:00am, and the all-important FOMC Announcement at 2:00pm.
The SPDR Dow Jones Industrial Average (NYSE:DIA) was unchanged in premarket trading Wednesday. Year-to-date, DIA has gained 14.89%, versus a 12.86% 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 75 ETFs in the Large Cap Value ETFs category.