Dow Jones Industrial Average Remains Weak In The Short Term

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

With little economic news to move the Market on Friday, investors continued to be influenced by Trade talk. The indices opened slightly higher, with the Nasdaq 100 (NDX) being weak again. After setting new record highs during the week, the NDX pulled back in the last two sessions. The Dow Jones Industrial Average (DJIA) finally broke its string of eight straight losses finishing with a small gain. By the end of the session the S&P 500 (SPX) managed to eke out a small gain. The 10-Year remained steady at 2.90, but there is some investor concern that additional rate hikes may hurt future earnings.

At the close, the DJIA was up 0.49%, the SPX inched up 5.1 points, and the NDX gave up 0.28%. Breadth was positive, 2 to 1, on slightly above average volume. ROC(10)’s were mixed, with the DJIA advancing, but remaining in negative territory. The NDX declined in the session and remained in positive territory. The SPX declined and continued in negative territory.

RSI’s were mixed, with the NDX falling, but remaining the strongest index at 59.3. The DJIA moved higher to 43.2 and the SPX finished at 52.7. The ARMS index ended the day at 1.09, a nearly neutral reading.

The major indices gave up some ground last week, despite the NDX making new record highs mid-week. For the week: DJIA down 0.2%, SPX off 0.8%, and NDX gave up 0.7%. On Wednesday, the NDX set a new closing high of 7280, and an intraday high of 7309. On Friday the NDX closed at 7197, remaining above its 20D-SMA of 7151. Its near and short term technicals remain strong, except for its MACD.

The DJIA broke its downward string of losses, closing at 24580. It remains weak near and short term, as it continues below its 50D-SMA of 24659. The DJIA continues below its 50% retrace level of 25074. The SPX closed at 2754, continuing above its 50% retrace level of 2726. It closed just a point below its 20D-SMA of 2755. It remains above its 50D-SMA of 2714. The VIX fell 5.9% to 13.77. For the week it was up 14.5%.

Near term support for the NDX is at 7151 and 7100. Near term resistance is at 7200 and 7280. Near term support for the SPX is at 2726 and 2714. Near term critical resistance is at 2788-89 and 2800.

Europe is significantly lower in early trade Monday, and US. Futures are off significantly in the premarket as well. The only major economic report on tap today is New Home Sales at 10:00am.

The SPDR Dow Jones Industrial Average (NYSE:DIA) fell $1.65 (-0.67%) in premarket trading Monday. Year-to-date, DIA has gained 0.14%, versus a 3.37% 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 81 ETFs in the Large Cap Value ETFs category.