Market technician Dave Chojnacki of Street One Financial recaps Monday’s strong rally, which pushed the Dow into the green for 2018, and updates the important technicals for the major U.S. averages.
Good Claims numbers helped the Market open to the upside on Thursday, as that number had the best reading in 48 years. The major indices continued their move to the upside through the day with the Dow Jones Industrial Average (DJIA) going positive for the year.
Materials, I/T and Financials were some of the stronger performing sectors in the session. Crude oil also continues to move higher with additional tensions in the Middle East.
The major indices did not seem to be rattled by Geopolitical issues and rallied into the close. They finished moderately stronger on the day. At the close, the DJIA was up 0.8%, the S&P 500 (SPX) added 0.94%, and the Nasdaq 100 (NDX) gained 1%. Breadth was decidedly positive, 2.6 to 1, on below average volume. ROC(10)’s declined in the session, with all three major indices in remaining positive territory.
RSI’s moved higher, with the NDX the strongest at 64. The DJIA is now at 58.5 and the SPX at 60.7. All three major averages continue with their MACD above signal. The ARMS index ended the day at 0.70, a bullish reading.
It was another strong day for the market, as the DJIA joined the other two major indices in positive territory for the year. The DJIA and SPX while gaining near and short term technical strength recently, remain below their 50% retrace levels of 25074 and 2726, respectively. The strength of Techs has kept the NDX above its 50% level of 6760.
The DJIA closed at 24739, comfortably above its 50D-SMA of 24416. As noted, it remains just below its 50% retrace level. The NDX closed at 6963, near its high of the session. The NDX is the strongest index and is heading towards its March closing high of 7131. The SPX ended the day at 2723, moving away from its 50D-SMA(2676). It remains just below its 50% retrace level of 2726. The VIX continues to move lower, falling 1.4% to 13.23.
Near term support for the NDX is at 6833 and 6800. Near term resistance is at 7000 and 7131. Near term support for the SPX is at 2676 and 2650. Near term critical resistance is at 2700 and 2676.
Europe is lower in early trade Tuesday, while U.S. Futures are slightly higher in the premarket. Major economic reports on tap today include Import/Export Prices at 8:30am and Consumer Sentiment at 10:00am.
The SPDR Dow Jones Industrial Average (SI:SPDR) ETF (DIA) fell $0.82 (-0.33%) in premarket trading Tuesday. Year-to-date, DIA has gained 0.76%, versus a 2.29% 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.