Weak Action Caps 2016
The last trading day of the year saw equities open lower as PMI numbers were lower than expected. This trend continued throughout the session as the major averages moved lower through the day. The NDX was the biggest loser, as investors were selling Tech issues. AAPL gave up nearly 0.8% in the session.
We saw volume pick back up, as portfolio managers surprised some people and were active, making last minute adjustments to their portfolios. At the close, the DJIA fell 57.1 points, the SPX lost 0.47%, and the NDX gave up 1.1%. Breadth was slightly negative, on above average volume.
The ARMS Index ended fairly bearish at 1.69. For the week, the DJIA lost 0.8%, the SPX was down 1.1 %, and the NDX fell 1.5%. For the year, the SPX gained 9.5% and the DJIA was up 13.4%.
The VIX is now up for 6 straight sessions. It ended up 5% on Friday to 14.04 and up 22.7% for the week. We get a slew of economic reports in this holiday shortened week. Most importantly, on Friday, we get the last look at Employment Numbers for 2016.
Long term, the upside bias continues. We saw the NDX make new highs at the beginning of last week, before losing ground by the end of the week. It established a new closing high of 4965 and intra-day high of 4992. All three major averages remain above long term weekly moving averages.
Short term, the bias remains to the upside, as all 3 major indices continue above 50% retracement levels of the last leg up. Near term, we saw weakness move into equities last week as MACD’s fell below signal. The NDX and SPX fell below their 20D-SMA’s of 4893 and 2249, respectively. The averages also broke below the ‘bull handle’ they were developing, suggesting they will need to rebuild for the next leg up. Critical near term support for the NDX is 4721 and 2187 for the SPX.
A Bullish Start
The Dow Jones Industrial Average is on pace to open up more than 100 points higher on this first trading day of 2017. Europe is also up in morning trading.
In terms of economic reports today, we’ll see the Construction Spending numbers as well as the latest ISM Index data both at 10:00am.
the SPDR Dow Jones Industrial Average ETF (NYSE:DIA) rose $1.32 (+0.67%) in premarket trading Tuesday. DIA currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #6 of 76 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.
Dave Chojnacki is the Chief Market Technician at Street One Financial. He provides technical support for the Street One team and also develops individual analysis for Clients as requested.
Dave is a major contributor to the ‘ETF Daily’, a morning newsletter providing clients a daily look at market technicals of the major indices and selected ETF’s. Market trends, support and resistance levels are provided in the daily letter. The Technical portion of the daily can also be found on Seeking Alpha. Mr. Chojnacki has been quoted in a number of industry publications including the Reuters, ETF Trends, Minyanville, Yahoo Financial and Investors.Com.
In addition, Dave assists with desk trading when necessary. He possesses a Series 7 and 63.
Prior to joining Street One, Dave designed and developed I/T Systems for the Insurance and Financial Industries.