Market technician Dave Chojnacki of StreetOne Technical Analysis recaps Tuesday’s up-and-dow trading action and updates the key technicals levels that investors and traders should focus on as we approach the final trading days of July.
After a slow start to the week on Monday, the major indices gapped up to a strong open following good earnings by Alphabet (NASDAQ:GOOGL) (GOOG). GOOG’s good numbers helped to push it to 3.5% gain on the day. The strong start did not last past the first hour of trading, when prices began to fall. The weakness spread across all indices, and seemed to target the Semi sector.
The averages were able to hold on to their gains by the final bell, but were cut to moderate gains. The gains were enough for the Nasdaq 100 to register new closing and intraday highs, although the Dow Jones Industrial Average was the best performer on the day. The 10YR has moved higher recently and ended the day at 2.95%.
At the close on Tuesday, the DJIA added 0.79%, the S&P 500 was up 0.48%, and the NDX gained 0.47%. Breadth was slightly negative, 1.2 to 1, on below average volume. ROC(10)s advanced in the session, with all three major averages remaining in positive territory. RSI’s moved higher with the SPX now leading at 64.6. The DJIA ended at 62.7 and the NDX finished at 64.4. All three MACD’s remain above signal. The ARMS index ended the day at 0.64, a fairly bullish reading at the close.
It was a fairly good day for the major indices, especially for the NDX, which hit new highs. The NDX closed at 7406, 3 points above its last record closing high. It recorded a new intraday high of 7475 mid-morning, before giving back a good piece of that gain. It has put more ground between it and its 20D-SMA of 7235. The DJIA ended the day at 25241, moving back above the important 50% retrace level of 25074. Its 20D-SMA(24715) remains below its 50D-SMA of 24791.
The SPX closed at 2820, but developed a ‘Doji’ in the session, indicating some in-decisiveness. It remains above its 20 and 50D-SMA’s of 2770 and 2754, respectively. The SPX remains 52 points below its closing record high of 2872. The VIX was down 1.6% to 12.41. Volatility remains relatively low.
Near term support for the NDX is at 7350 and 7300. Near term resistance is at 7450 and 7475. Near term support for the SPX is at 2812 and 2800. Near term critical resistance is at 2825 and 2850.
Europe is lower in early trade Wednesday, while U.S. Futures are slightly lower in the premarket. The only major economic report due out today is New Home Sales at 10:00am.
The SPDR Dow Jones Industrial Average (NYSE:DIA) ETF fell $1.01 (-0.40%) in premarket trading Wednesday. Year-to-date, DIA has gained 2.80%, versus a 5.95% 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 81 ETFs in the Large Cap Value ETFs category.