Market technician Dave Chojnacki of Street One Financial checks in during a holiday-shortened trading week to update the important technical indicators for the major U.S. averages, which look poised to end the year on a high note.
The markets opened after the holiday on Tuesday, but many of the players were still missing. The major indices traded to the negative side despite good Case-Shiller Housing numbers. Energy was the only sector that performed well in the session, getting a boost from a terror attack in Libya shutting down a major terminal.
The indices traded in a very narrow range, with the S&P 500 (SPX) moving only 5 points during the session. By the end of the day, all three major averages finished in the red, with the Nasdaq 100 (NDX) the weakest.
At the close, the Dow Jones Industrial Average (DJIA) was down 7.8 points, the SPX slipped 2.8 points, and the NDX fell 0.5%. Breadth was positive, 1.3 to 1, on very light volume. ROC(10)s declined for all three major indices, but remained in positive territory.
RSI’s moved slightly lower, with the DJIA continuing to remain the leader at 74. The SPX finished at 68.1 and the NDX at 57.4. The DJIA saw its MACD cross below signal In the session, cautioning for the near term. The NDX and SPX remain with their MACD above signal. The ARMS index ended at 0.68, a bullish reading at the close.
It was a dull session for the major averages, but when it was over, it was the fourth session in five that ended in the red. The DJIA closed at 24746, closing above its 20D-SMA of 24431. Its MACD crossed below signal and we will be watching that closely over the next few sessions.
The NDX was the biggest loser on the day, closing at 6407. It remains just above its 20D-SMA of 6389. It is now more than 100 points from its record closing high of 6513.
The SPX closed at 2680, trading as high as 2682 in the session. It remains above its 20D-SMA of 2657. The VIX pushed back above the 10 handle. It closed at 10.25, up 3.5%.
Near term support for the NDX is at 6389 and 6350. Near-term resistance is at 6450 and 6500. Near term support for the SPX is at 2675 and 2657. Near-term resistance is at 2690 and 2700.
Europe is mixed in early trade Wednesday, while U.S. Futures are also mixed in the premarket. Major economic reports on tap today include Consumer Confidence at 10:00am and Pending Home Sales at 10:00am.
The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) was unchanged in premarket trading Wednesday. Year-to-date, DIA has gained 27.72%, versus a 21.86% 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 #3 of 80 ETFs in the Large Cap Value ETFs category.