Dow Jones Industrial Average Looks To Build On Record Highs

Market technician Dave Chojnacki of StreetOne Technical Analysis kicks off the new trading week with a deep dive into the underlying technicals for the major U.S. averages.

With no major economic news on Friday, traders concentrated on options expiring at the end of the day. The major indices got off to a good start, but quickly began giving up some of those gains. Once again, the Tech sector was weak, and this was reflected in the NDX, as it was the biggest loser of the big three. The loss was small, but left the NDX down 0.1% for the week. Conversely, the Dow Jones Industrial Average was up in the session and hit new record highs. The DJIA also had a good week, finishing up 2.2% for the week. The SPX ended little changed, but to the downside on Friday. During the session the SPX hit a new intraday high. For the week, the SPX added 0.8%. The 10YR moved very little and finished at 3.07%.

At the close on Friday, the DJIA added 0.32%, the SPX inched down 1 point, and the NDX gave up 0.5%. Breadth was slightly positive, on much above average volume. Volume spiked on quadruple options expiration. ROC(10)s were mixed with the DJIA and SPX advancing and remaining in positive territory. The NDX declined but remained in positive territory. RSI’s were mixed, with the DJIA the strongest at 76.6. It remains in overbought territory. The NDX ended at 53.6 and the SPX at 67.6. The DJIA and SPX continue with their MACD above signal. The NDX remains below signal. The ARMS index ended the day at 0.80, a bullish reading.

The DJIA and SPX had a good week, as Financials and Industrials lead the way. The DJIA set new record highs during the week and ended Friday 26743. It traded as high as 26769 in the session. The DJIA is just outside its upper Bollinger Band®, which sits at 26581. It is comfortably above its 20D-SMA of 26103. The SPX closed down a point on Friday to 2929, but traded at a new intraday record high of 2940. The SPX 20D-SMA is at 2897 and its 50D-SMA sits at 2857. The SPX closed 1 point above its upper Bollinger Band®, which is at 2928. The NDX closed at 7531, closing just below its 20D-SMA of 7533. It continues to hold above its 50D-SMA of 7443. The VIX finished at 11.68, down 1% on Friday. The VIX was down 3.2% for the week.

Near-term support for the NDX is at 7443 and 7400. Near-term resistance is at 7533 and 7600. Near-term support for the SPX is at 2900 and 2897. Near-term resistance is at 2930 and 2940.

Europe is lower in early trade Monday, while U.S. Futures are lower as well in the premarket. There are no major economic reports on tap for today.

The SPDR Dow Jones Industrial Average (NYSE:DIA) fell $0.91 (-0.34%) in premarket trading Monday. Year-to-date, DIA has gained 8.88%, versus a 9.86% 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 82 ETFs in the Large Cap Value ETFs category.