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.
Last week’s roller coaster week continued on Friday. Good Employment Numbers had equities gapping up at the open. It was a good way to start the month of June, as the major indices moved higher through the morning hours peaking in the early PM. The Nasdaq 100 (NDX) continued to outpace the other major indices, as Techs were leading the way. Many Tech issues were trading at or near their all-time highs. All three major averages ended the day with significant gains.
During the week, Techs were also the stronger sector, pushing the NDX to the best gains. The NDX was up 1.7% for the week, the S&P 500 (SPX) added 0.4%, and the Dow Jones Industrial Average (DJIA) gave up 0.4%. Volume on the down days last week was much stronger than the up days.
At the close on Friday, the DJIA added 0.9%, the SPX moved up 1%, and the NDX gained 1.6%. Breadth was decidedly positive, 2.2 to 1, on average volume. ROC(10)’s advanced, with the SPX crossing back into positive territory. The NDX remains in positive territory, while the DJIA is in the red.
RSI’s moved higher, with the NDX continuing to lead at 66.7. The DJIA is now at 51 and the SPX at 56.9. The DJIA and SPX MACD’s remain below signal, while the NDX continues above signal. The ARMS index ended the day at 1.10, a fairly neutral reading.
We had many mixed signals last week, with the major averages diverging from one another. Techs were the strong performer and the NDX continues strong, near and short term. The DJIA and SPX had their MACD’s move below signal last week. The DJIA remains below its 50% retrace level of 25074 and is below its 20D-SMA of 24663.
The SPX near term technicals improved somewhat, with it closing above its 20D-SMA of 2712. It also closed above its 50% retrace level of 2726. The SPX continues comfortably above its 50D-SMA of 2672. The NDX continues to be strong, closing at 7083, only 48 points below its closing high of 7131. It remains above its 50% retrace level of a 6760, and above its 20D-SMA of 6919. The VIX fell 12.2% on Friday to finish at 13.46.
Near term support for the NDX is at 7000 and 6950. Near term resistance is at 7131 and 7186. Near term support for the SPX is at 2712 and 2700. Near term critical resistance is at 2750 and 2800.
Europe is higher in early trade Monday, and U.S. Futures are higher in the premarket. The only major economic report on tap today is Factory Orders at 10:00am.
The SPDR Dow Jones Industrial Average (SI:SPDR) ETF (DIA) rose $1.27 (+0.52%) in premarket trading Monday. Year-to-date, DIA has gained 0.42%, versus a 2.94% 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.