Technical analyst Dave Chojnacki of Street One Financial wraps up the holiday-shortened trading week with an update of the important technical levels for the major U.S. indexes, which remain highly rangebound in choppy trading activity.
The market fell right from the open on Thursday, which may have been ignited by Initial Claims numbers, which came in much higher than expected. Hurricanes also continued to weigh on equities, as the threat of Irma pounding Florida continues to increase.
The trading was choppy throughout the day, and in a very narrow range. Volume was up again as the major averages traded within technical ranges. By the close, the major indices were mixed and little changed.
At the close, the Dow Jones Industrial Average was down 22.8 points, the S&P 500 slipped just 0.44 of a point, and the Nasdaq 100 added 13.1 points. Breadth was just slightly positive, on above average volume. ROC(10)s advanced, with the DJIA remaining the only major index in negative territory.
RSIs were little changed, with the NDX the strongest at 59. The DJIA ended at 47.8 and the SPX at 54. The NDX and SPX remain with their MACD above signal. The DJIA continues below. The ARMS index ended the day at 1.05, a neutral reading.
Traders seemed to be unable to determine whether they should be buying or selling. The major indices traded in a choppy fashion and within technical levels. A good example is the DJIA, which, traded between 21745 and 21850 in the session. Its 20-D SMA is 21850 and its 50-D SMA is at 21741. It remains several hundred points below its all-time closing of 22118.
The NDX continues to be the strongest index near term. It is comfortably above its 20-D SMA (5878) and 50-D SMA. It developed a ‘Doji’ (candlestick) in the session, indicating the indecision in the market. The SPX continued barely above its 20-D SMA (2451) and 50-D SMA (2454). It remains just below the trendline of 2468.
The VIX slipped 0.69% to 11.55. It remains below the benchmark level of 12, with volatility subdued.
Near-term support for the NDX is at 5950 and 5925. Near term resistance is at 5975 and 5988. Near-term support for the SPX is at 2454, 2451, 2450 and 2437. Near-term resistance is at 2468, 2475 and 2480.
Europe is mixed in early trade Friday, while U.S. Futures are pointing lower in the premarket. The only major economic report on tap today is Wholesale Trade at 10:00 am as we close out the week.
The SPDR Dow Jones Industrial Average (SI:SPDR) ETF fell $0.67 (-0.31%) in premarket trading Friday. Year-to-date, DIA has gained 12.08%, versus a 11.46% 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 75 ETFs in the Large Cap Value ETFs category.