Technical analyst Dave Chojnacki of Street One Financial recaps Monday’s quiet market action and updates the important technical levels to watch as we inch toward the Thanksgiving holiday.
Leading Indicators were better than expected, but did little to help equities. The Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) traded just above the flat line during the session in a narrow range. The Nasdaq 100 (NDX) spent time on both sides of the flat line during the day.
With the shortened week and investors waiting for the final details on the Tax Reform, trading may be a little dull this week. By the end of the session, the DJIA was the best gainer. The SPX finished with a small gain, while the NDX gave up a few points as volume slacked off.
At the close, the DJIA added 0.31%, the SPX inched up 3.2 points, and the NDX gave up 5.9 points. Breadth was positive, 1.5 to 1, on below average volume. ROC(10)’s were mixed, with the DJIA advancing, but remaining in negative territory. The NDX crossed into negative territory joining the other major indices. The SPX was unchanged and remained in negative territory.
Momentum continues to wane. RSI’s rose for the DJIA and SPX and fell for the NDX. The NDX remains the strongest at 62.2. RSI’s for the DJIA and SPX have been declining since October 20th. MACD’s remain below signal for all three major indices. The ARMS index ended the day at 1.14, slightly weak.
Near term, the averages have been weak and momentum has slowed. We have also had choppy action in the last 2 weeks, which may be signaling a ‘topping’ action. The DJIA closed at 23430, just 7 points below its 20D-SMA of 23437. The NDX lost a few points, closing at 6308. It remains above its 20D-SMA of 6253, and is just 37 points below its record closing high of 6345. The SPX closed at 2582, 3 points above its 20D-SMA of 2579. It sits just 12 points below its closing high of 2594. The VIX finished at 10.65, down 6.8%.
Near term support for the NDX is at 6253 and 6225. Near term resistance is at 6345, 6352 and 6375. Near term support for the SPX is at 2579 and 2562. Near term resistance is at 2594, 2597 and 2600.
Europe is higher in early trade Tuesday, and U.S. Futures are pointing higher in the premarket. The only major piece of economic news on tap for today is Existing Home Sales at 10:00am.
The SPDR Dow Jones Industrial Average (SI:SPDR) rose $0.65 (+0.28%) in premarket trading Tuesday. Year-to-date, DIA has gained 20.32%, versus a 16.62% 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 80 ETFs in the Large Cap Value ETFs category.