Market technician Dave Chojnacki of Street One Financial kicks off the holiday-shortened trading week with an update of the important technical levels to watch for the major U.S. averages, as geopolitical events continue to take center stage.
The Friday before a long weekend and the last unofficial week of the summer found many traders already gone for the weekend. Volume was weak, and the major indices were little changed at the final bell.
Economic numbers were mixed and the Employment Report, which came in below estimates, did show good Manufacturing and Construction numbers. By the close, the major averages were mixed, but held on to the weekly gains. At the close, the Dow Jones Industrial Average (DJIA) added 39.4 points, the S&P 500 (SPX) inched up 4.9 points, and the NASDAQ 100 (NDX) fell 0.70 of a point.
Breadth was positive, 2.2 to 1, on below average volume. ROC(10’s) advanced, with the major indices in positive territory. RSI’s were steady and remain in the upper 50’s to low 60’s. The ARMS Index ended strong at 0.65.
For the week, the major indices had good gains: the DJIA was up 0.7%, the SPX gained 1.3%, and the NDX up 2.8%. The VIX fell 4.3% to 10.13. The VIX fell 10.1% for the week.
Economic reports are light this week, and North Korea will no doubt be in the headlines as the rest of the world figures out how to deal with their nuclear program.
Long term, the upside bias in the U.S. markets continues. The NDX made new closing highs last week and hit the 6000 level. The major indices remain comfortably above their 200D-SMAs: DJIA-5.9%, NDX-9.9%, SPX-4.8%.
Short term, the major indices were challenging their upside bias, but last week’s strength kept it intact. The SPX is now back above its short term trend-line of 2458. The SPX holds above its 50D-SMA of 2452, and the NDX holds its 50D-SMA of 5834. Near term, bias reversed to the upside last week as internals improved. The major indices MACD’s are now back above signal and near term moving averages. The SPX and DJIA are positioned to challenge their all-time highs.
Europe is mixed in early trade Monday, and U.S. Futures are pointing moderately lower in the premarket. The only major economic report on tap today is the Factory Orders report at 10:00am.
The SPDR Dow Jones Industrial Average (NYSE:DIA) fell $0.72 (-0.33%) in premarket trading Tuesday. Year-to-date, DIA has gained 13.01%, versus a 11.90% 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 75 ETFs in the Large Cap Value ETFs category.