Market technician Dave Chojnacki of Street One Financial wraps up the trading week with a recap of Thursday’s mixed market action, and updates his outlook on the important technical indicators for the U.S. averages, which are once again being led higher by the big tech stocks.
Equities opened higher on Thursday, as Claims Numbers came in a little better than expected. Techs continued their rebound, as money was moving back into the big Technology names. This helped to push the Nasdaq 100 to be the best gainer out of the big three. The Dow Jones Industrial Average and S&P 500 had small gains on the day, however, they finished off their highs.
Trading was somewhat subdued again, as traders await the Employment Report this morning. The strength was broad, as the iShares Russell 2000 (NYSE:IWM) broke its 4-day losing streak. At the close, the DJIA was up 0.29%, the SPX added 7.7 points, and the NDX gained 0.37%. Breadth was positive, 1.8 to 1, on below average volume. ROC(10)’s advanced, with the DJIA and SPX remaining in positive territory. The NDX advanced, but remained in negative territory.
RSI’s moved higher, with the DJIA moving back over the70 level to 71.5. The SPX finished at 67.3 and the NDX at 53.1. The DJIA and SPX remain with their MACD above signal, while the NDX remains below. The ARMS index ended at 0.90, a slightly bullish reading. The NDX finished with the best gain for the second session in a row. The big Techs, specifically, FB, AMZN and GOOG had good days.
The NDX closed at 6316, remaining just below the 20D-SMA of 6330. It traded as high as 6333, meeting resistance right near the 20D level.
The DJIA closed at 24211, and traded as high as 24262. It moved further away from its 20D-SMA which is 23730. The SPX closed at 2636, remaining above its 20D-SMA of 2606. It traded as high as 2640 in the session. IWM (Russell 2000) closed at 151.27, reversing its 4 day slide. The VIX finished down 7.8% to 10.16.
Near term support for the NDX is at 6300 and 6250. Near term resistance is at 6325 and 6330. Near term support for the SPX is at 2625 and 2612. Near term resistance is at 2647, 2650 and 2665.
Europe is higher in early trade Friday, while U.S. Futures are pointing higher in the premarket. Major economic reports on tap today include the Employment Report at 8:30am, Consumer Sentiment at 10:00am, and Wholesale Trade also at 10:00am.
The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) rose $0.41 (+0.17%) in premarket trading Friday. Year-to-date, DIA has gained 24.54%, versus a 19.23% 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 80 ETFs in the Large Cap Value ETFs category.