Technical analyst Dave Chojnacki of Street One Financial recaps Monday’s sleepy trading action and previews the rest of the week with an update of the important underlying technicals for the major U.S. averages.
Investors were still stuffed from their Thanksgiving dinners, and had a hard time getting the market off to a good start on Monday morning. Good Housing numbers gave the indices a boost, pushing all three major indices to new highs, but they couldn’t hold those levels.
Equities settled back to trade near the flat line for most of the session. By the end of the day, the averages were mixed and little changed. We expect the action to be pensive for the next few weeks as investors wait to see tax reform action in Washington.
At the close, the Dow Jones Industrial Average (DJIA) added 22.7 points, the S&P 500 (SPX) slipped just 1 point, and the Nasdaq 100 (NDX) fell 3.3 points. Breadth was negative, 1.5 to 1, on below average volume. ROC(10)’s advanced for the DJIA and SPX, but were unchanged for the NDX. All three major averages remain in positive territory.
RSI’s were little changed, with the NDX the strongest at 70.2. The DJIA and SPX are in the low 60’s. MACD’s remain below signal for the DJIA and SPX. The NDX MACD continues above signal. The ARMS index ended the day at 1.03, nearly neutral.
All three major averages moved to new intra-day highs during the session, however, they were unable to hold those gains into the close. All three met resistance near their upper Bollinger Bands®.
It was a rather lethargic session, as investors continue to focus on tax issues in Washington. The DJIA traded as high as 23638 (a new high) and closed at 23580. Its 20D-SMA is at 23469. The NDX closed at 6392, but traded at an intra-day record high of 6420. The NDX 20D-SMA remains at 6313.
The SPX continued to hold the 2600 level, closing at 2601. It also hit a new intra-day high of 2606. Its 20D-SMA sits at 2585. The VIX added 0.2% to finish at 9.87.
Near term support for the NDX is at 6400 and 6375. Near term resistance is at 6420 and 6425. Near term support for the SPX is at 2600 and 2588. Near term resistance is at 2602, 2606 and 2612.
Europe is higher in early trade on Tuesday, and U.S. Futures are also pointing higher in the premarket. Major economic reports on tap today include International Trade at 8:30am, FHFA House Price Index at 9:00am, and Consumer Confidence at 10:00am.
The SPDR Dow Jones Industrial Average (SI:SPDR) ETF was unchanged in premarket trading Tuesday. Year-to-date, DIA has gained 21.14%, versus a 17.49% 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 80 ETFs in the Large Cap Value ETFs category.