Market technician Dave Chojnacki of Street One Financial recaps Monday’s anemic trading action and updates the important technicals to focus on for the major U.S. averages, which are exhibiting cautious signals as we move toward the holiday season.
With no major economic reports to start off the Monday session, equities got off to a flat start. The major indices traded on both sides of the flat-line during the day. There were no new leaks from Capitol Hill regarding Tax Reform, however, there was talk that progress is on or ahead of schedule.
By the end of the session, the major indices eked out small gains on low volume, as is typical for a Monday session. At the close, the Dow Jones Industrial Average (DJIA) was up 17.4 points, the S&P 500 (SPX) added 2.5 points, and the Nasdaq 100 (NDX) increased just 7.1 points. Breadth was negative, 1.2 to 1, on below average volume. ROC(10)’s were mixed, with the DJIA moving back into positive territory. The NDX declined but stayed in positive territory. The SPX advanced and remained in positive territory.
RSI’s inched up for all the major indices, with the NDX remaining the strongest at 70.6. The DJIA ended at 65.6 and the SPX at 63.2. The DJIA and SPX remain with their MACD below signal. The NDX is the only major index with its MACD above signal. The ARMS index ended the day at 1.04, a neutral reading.
It was another slow Monday, as investors continue to wait for finalization of the Tax Reform legislation. The major indices added a few points in the session. The DJIA and SPX have their MACD below signal, which spreads caution near term.
The DJIA closed at 23439. It remains above its 20D-SMA of 23386. It upper Bollinger Band® stands at 23676. The SPX closed at 2584 and traded as low as 2574. The 20D-SMA is now at 2575. Its upper Bollinger band is 2598. The NDX ended at 6316 and remains well above its 20D-SMA of 6203. The NDX continues as the strongest index, near term.
The VIX added 1.8% to finish at 11.50.
Near term support for the NDX is at 6300 and 6250. Near term resistance is at 6346 and 6350. Near term support for the SPX is at 2575 and 2562. Near term resistance is at 2597 and 2600.
Europe is mixed in early trade Tuesday, while U.S. Futures are pointing slightly lower in the premarket. The only major piece of economic data on tap today is PPI at 8:30am.
The SPDR Dow Jones Industrial Average (SI:SPDR) fell $0.34 (-0.14%) in premarket trading Tuesday. Year-to-date, DIA has gained 20.59%, versus a 16.64% 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.