Market technician Dave Chojnacki of StreetOne Technical Analysis wraps up the trading week with a deep dive into the technical indicators for the major U.S. averages.
Equities opened higher on Thursday, after the brief holiday. Rumors that the US and Europe may be close to a deal on Auto Trade, sparked the Markets. The major averages were up modestly in the early going than dropped after the first hour. The indices did reverse to the upside again, until the FED Minutes, when a hawkish tone, lead a minor sell-off. Prices picked back up again, as very weak volume, lead to radical price swings. By the end of the day, all three major indices closed with moderate to significant gains. The 10YR ended at 2.84, as the yield curve continues to flatten.
At the close, the Dow Jones Industrial Average (Dow) was up 0.75%, the SPX added 0.86%, and the NDX tacked on 1.2%. Breadth was decidedly positive, 3 to 1, on very weak volume. ROC(10)’s advanced in the session, with all three major averages remaining in negative territory. RSI’s ticked higher, with the NDX continuing to be the strongest at 51.6. The Dow ended at 43.8, and the SPX finishing at 50.5. MACD’s remain below signal for all three major indices. The ARMS index ended the day at 0.83, a slightly bullish reading.
It was definitely a holiday shortened week type of session on Thursday. Volume was low and prices bounced all over the place. In the end, the indices had a fairly good day as traders wait for today’s Employment Report. The Dow closed at 24356, pushing above its 200D-SMA by 3 points. It continues below its 50D-SMA of 24618. The Dow continues technically weak in the near and short term. The NDX ended at 7101, as it remains the strongest index. It continues above its 50D-SMA of 6985, but below its 20D-SMA of 7148.
The NDX continues above its 50% retrace level of 6760, keeping its short term bias to the upside. The SPX closed at 2736, above its 50D-SMA of 2721. It remains below its 20D-SMA of 2750, but above its 50% retrace level of 2726. While it remains with a short term bias to the upside, it continues to have some near term weakness. The VIX fell 7.2% to 14.97. The VIX continues to be docile. Near term support for the NDX is at 6985 and 6846. Near term resistance is at 7148 and 7200. Near term support for the SPX is at 2726 and 2721. Near term critical resistance is at 2727 and 2750. Europe is slightly lower in early trade. US Futures are pointing lower pre-market. Major economic reports on tap today include the Employment Report at 8:30am and Foreign Trade at 8:30am.
The SPDR Dow Jones Industrial Average (NYSE:DIA) fell $0.83 (-0.34%) in premarket trading Friday. Year-to-date, DIA has declined -0.73%, versus a 2.75% 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 81 ETFs in the Large Cap Value ETFs category.