Market technician Dave Chojnacki of StreetOne Technical Analysis recaps Monday’s market action and looks ahead to Tuesday’s session with an update of the underlying technicals for the major U.S. averages.
The week started off with equities moving higher at the open. Despite a poorer than expected factory orders report, the major averages remained in positive territory.
Techs continue to shine and pushed the Nasdaq 100 (NDX) to a new closing record high. The averages traded sideways through most of the afternoon hours. AMZN, NFLX, and AAPL all hit new highs on Monday. I.T. and Consumer Staples were the best performing sectors on the day.
The 10YR remains below the 3 handle at 2.94%. The Dow Jones Industrial Average (DJIA) got back into positive territory for the year, closing above the 2017 close of 24719. The major indices ended the day with moderate to significant gains.
At the close, the DJIA was up 0.7%, the S&P 500 (SPX) added 0.45%, and the NDX gained 0.84%. Breadth was decidedly positive, 1.9 to 1, on average volume. ROC(10)’s advanced, with the DJIA crossing back into positive territory. The NDX and SPX remain in positive territory.
RSI’s moved higher, with the NDX leading at 69.6, heading towards slightly overbought levels. The DJIA is now at 54.6 and the SPX at 59.1. The SPX MACD crossed above signal, joining the NDX. The DJIA MACD remains the only major index below signal. The ARMS index ended the day at 1.19, a slightly bearish reading.
We saw several improving technicals in Monday’s session. The DJIA closed back above its 20D-SMA of 24691. It also closed above its 2017 close and its ROC(10) crossed back into positive territory. The DJIA remains the only index of the big three below its 50% retrace level of 25074.
The SPX closed at 2746, firmly above its 50% retrace level of 2726. It remains above its 20D-SMA of 2716. The next critical resistance level is 2800. The NDX ended the day at 7143, above its March closing high of 7131. Its intraday high stands at 7186. It remains comfortably above its 20D-SMA of 6937. The VIX fell 5.2% to finish at 12.74.
Near term support for the NDX is at 7100 and 7050. Near term resistance is at 7150 and 7186. Near term support for the SPX is at 2726 and 2716. Near term critical resistance is at 2750 and 2800.
Europe is higher in early trade, and U.S. Futures are higher in the premarket as well. Major economic reports on tap today include PMI Services Index at 9:45am, ISM Non-Manufacturing Index at 10:00am, and JOLTS job openings at 10:00am.
The SPDR Dow Jones Industrial Average (SI:SPDR) ETF rose $0.21 (+0.08%) in premarket trading Tuesday. Year-to-date, DIA has gained 1.17%, versus a 3.43% 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.