Technical analyst Dave Chojnacki of Street One Financial kicks off the new trading week with a recap of where things stand in the U.S. markets, which were mostly unchanged last week to wrap up the month of September.
Economic reports came in close to expectations on Friday with no big surprises. Equities moved to the upside on Friday with investors moving into the big Technology names at the end of the month and quarter. This lead to the Nasdaq 100 seeing good gains. The S&P 500 (SPX) finished with a small gain, but closed at a new record high.
Small-caps, in the form of IWM (iShares Russell 2000), had record highs for the 6th straight session. At the close, the Dow Jones Industrial Average (DJIA) gained 23.8 points, the SPX added 9.3 points, and the NDX moved up 0.78%. Breadth was positive, 1.5 to 1, on below average volume.
ROC(10’s) were mixed, with the NDX the only index remaining in negative territory. The SPX has taken over the lead in RSI’s, with a 68.7 reading. The DJIA is now at 67.8 and the NDXZ at 56.3. The ARMS Index ended at 1.22, a slightly bearish reading.
For the week, the DJIA was up 0.2%, the SPX gained 0.6%, and the NDX added 0.7%. The VIX fell 0.04 to 9.51. The VIX was little changed during the week.
Long term, the upside bias continues. We had the SPX making new highs last week and the DJIA and NDX remain within striking distance of their record highs. This week we look at the 50WK moving average: DJIA-20657, NDX-5424, SPX-2353.
Short term, the major indices continue to keep the upside bias intact. The SPX continues above its 9 month upside Trend-line, now at 2498. The NDX moved back above its 50D-SMA of 5913, after falling below. Near term, the bounce in the NDX moving back above its 20D-SMA of 5954, keeps the bias to the upside. Its MACD continues to remain below signal. Near term critical support is as follows: DJIA-21600, NDX-5750, SPX-2417.
Europe is moving higher in early trade Monday, and US Futures are pointing higher in the premarket as well. Economic data reports on tap today include PMI Manufacturing Index at 9:45am, ISM Manufacturing Index at 10:00am, and Construction Spending at 10:00am.
The SPDR Dow Jones Industrial Average (SI:SPDR) rose $0.48 (+0.21%) in premarket trading Monday. Year-to-date, DIA has gained 15.02%, versus a 13.43% 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 #4 of 75 ETFs in the Large Cap Value ETFs category.