Market technician Dave Chojnacki of StreetOne Technical Analysis kicks off the new trading week with a recap of Friday’s market action, and updates the important technical indicators to watch for the major U.S. averages.
Equities opened higher on Friday as we received a slew of economic numbers. Retail Sales numbers came in a little lower than expected, but the internals did not disappoint. Consumer Sentiment came in strong at 100.8. The major averages were trading higher through the morning hours, but took a hit when there was a mention of additional 200Billion in China tariffs. By the end of the session, the averages were mixed and little changed. They held on enough to eke out gains for the week. The Dow Jones Industrial Average (DJIA) was up 0.9% for the week. The NDX gained 1.5% and the SPX 2.9% for the week. The 10YR moved higher during the week and ended at 2.99%.
At the close on Friday, the DJIA inched up 8.6 points, the SPX added just 0.8 of a point, and the NDX gave up 16.1 points. Breadth was slightly positive, on below average volume. ROC(10)’s were mixed, with the DJIA advancing. The SPX crossed back into positive territory, while the NDX declined and remained in negative territory. RSI’s were mixed with the DJIA remaining the strongest at 65.8. The NDX ended at 56.1 and the SPX at 64.1. All three major indices remain with their MACD’s below signal. The ARMS index ended the day at 0.91, a slightly bullish reading.
The SPX finished in the black for five straight sessions last week. It was the best gainer on the week. The DJIA closed higher in four straight sessions. After consolidation in the prior week, the averages attempted to resume their winning ways. The SPX closed at 2904 on Friday, holding the 2900 level and above its 20D-SMA of 2883. The 50D-SMA now sits at 2849. The SPX is just 10 points below its recent record closing high of 2914.
The NDX gave up a few points on Friday, but held the 7500 level, finishing at 7545. The NDX 20D-SMA is now at 7506. Near term critical support is at its 50D-SMA of 7420. The DJIA ended at 26154, still nearly 500 points below its record high. It continues above its 20D-SMA 25929. The VIX fell 2.4% to finish at 12.07. For the week, the VIX was down 19%.
Near term support for the NDX is at 7506 and 7401. Near term resistance is at 7600 and 7660. Near term support for the SPX is at 2900 and 2883. Near term resistance is at 2914-16 and 2925.
Europe is lower in early trade Monday, and U.S. Futures are slightly lower in the premarket. The only major economic report out today is the Empire State Index at 8:30am.
The SPDR Dow Jones Industrial Average (NYSE:DIA) ETF (DIA) fell $0.27 (-0.10%) in premarket trading Monday. Year-to-date, DIA has gained 6.75%, versus a 9.44% 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 82 ETFs in the Large Cap Value ETFs category.