Market technician Dave Chojnacki of Street One Financial updates the important technical levels to watch in the major U.S. averages, as tech stocks continue to take the lead from industrials.
Equities ignored the terror attack in NYC and opened to the upside on Wednesday. Economic reports were mixed and had little impact on investors. Rumors coming out of Washington, regarding Tax Reform, put a stop on the rally, however, and the major indices slid lower as traders awaited the FOMC announcement at 2pm.
There were no surprises from the Fed, but equities got a bounce and then held steady into the close. The early rally enabled all three major indices to hit new intraday highs. Only the Nasdaq 100 (NDX) was able to hold enough of a gain to close at a new high. At the close, the Dow Jones Industrial Average (DJIA) added 0.25%, the S&P 500 (SPX) inched up 4.1 points, and the NDX added just 0.09 of a point.
Breadth was slightly positive, 1.1 to 1, on average volume. ROC(10)’s were mixed, with the DJIA declining and the SPX and NDX advancing. RSI’s inched higher, with the DJIA remaining the strongest, at 74.6. The NDX finished at 72.1 and the SPX at 67.2. The DJIA had its MACD cross below signal, joining the SPX. The NDX remains with its MACD above signal. The ARMS index ended at 0.81, a slightly bullish reading. ‘
As noted earlier, all three major indices hit new intraday highs early in the session. All three indices were able to hang on to small gains, despite the reversal. Volume tapered off and we expected that, going into the Employment Report on Friday. The NDX closed at 6248.65, just barely closing at a new high. The intraday high was established at 6276. It closed slightly above its upper Bollinger Band® of 6242. Its 20D-SMA is at 6110.
The DJIA intra-day new high was 23517. Its 20D-SMA sits at 23079. The SPX intraday high was 2588, and it closed at 2579. It closed just below its upper Bollinger Band of 2582. The VIX added 0.02 of a point to 10.20.
Near term support for the NDX is at 6225 and 6200. Near term resistance is at 6250, 6275 and 6276. Near term support for the SPX is at 2575, 2561 and 2550. Near term resistance is at 2580-82 and 2588.
Europe is mixed in early trade Thursday, and U.S. Futures are pointing lower. Economic reports on tap today include Challenger Job Report at 7:30am, Jobless Claims at 8:30am, Productivity and Costs at 8:30am, and the EIA Natural Gas Report at 10:30am.
The SPDR Dow Jones Industrial Average (SI:SPDR) was unchanged in premarket trading Thursday. Year-to-date, DIA has gained 20.34%, versus a 16.26% 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 76 ETFs in the Large Cap Value ETFs category.