Market technician Dave Chojnacki of Street One Financial provides a technical update on the major U.S. stock market averages, which includes a record string of new all-time highs for the Dow.
The major averages opened lower yesterday, as Durable Orders came in as expected. Weak Pending Home Sales did little to hold back equities, as the major indices reversed into positive territory within the first hour.
The remainder of the session had the indices moving in a narrow range and bouncing from negative to positive territory. By the final close, the averages managed to eke out a small gain, with the DJIA closing at a new record high for the 12th straight session. The SPX also closed at a new high.
At the close, the DJIA gained 15.6 points, the SPX inched up 2.4 points, and the NDX added 4.2 points. Breadth was positive, 1.5 to 1, on weak volume. ROC(10)’s declined, but all three averages remain in positive territory
RSI’s were little changed, with the DJIA the leader at 82.1. All three continue at overbought levels. All three major indices also continue with their MACD above signal.
The ARMS index ended the day at 0.78, a slightly bullish level.
The DJIA had never before closed at 12 straight record highs in its 100 year history. While the gains were small yesterday, the DJIA and SPX still closed at new levels.
Volume was weak, as the averages remained in a tight range for the 4th straight session. The SPX and NDX are comfortably above their 20D-SMA’s of 2323 and 5243, respectively. Our near term targets are SPX-2382 and NDX-5362.
iShares Russell 2000 (NYSE:IWM) (small-caps) was one of the better performers on the day, up 0.97% to 140.00. It closed just 0.20 below its recent closing record high of 140.20.
Meanwhile, SPDR Gold Shares (NYSE:GLD) (Gold) is testing its 200D-SMA (120.44) as it traded as high as 120.40 in the session. We expect formidable resistance at this level.
The VIX spiked 5.4% to close at 12.09 yesterday, in another divergence with the market averages.
Near term support for the NDX is at 5325 and 5300. Near term resistance is at 5350 and 5362. Near term support for the SPX is at 2362, 2350 and 2337. Near term resistance is at 2375, and 2382.
Europe is mixed in early trade, and U.S. Futures are also mixed before the bell. President Trump speaks to Congress tonight, but before that, we’ll see a slew of important economic reports today. On tap are the GDP numbers and Wholesale Inventories both at 8:30am, Chicago PMI at 9:45am, and Consumer Confidence at 10:00am.
The SPDR Dow Jones Industrial Average (NYSE:DIA) was unchanged in premarket trading Tuesday. Year-to-date, DIA has gained 5.46%, versus a 6.08% 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 #6 of 75 ETFs in the Large Cap Value ETFs category.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, David Chojnacki, does not endorse or recommend any issuer or security mentioned herein.