Very Weak Volume Begins To Hit The Dow Jones Industrial Average

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March 30, 2017 8:21am INDEXDJX:.DJI NYSE:DIA

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Market technician Dave Chojnacki of Street One Financial looks at Wednesday’s mixed market action, which saw the tech sector once again take the lead as volume dried up significantly in the DJIA and S&P 500.


The major indices opened flat again yesterday, but after a decent Pending Home Sales report, prices moved slowly higher. Once again, Techs were out-performing, giving the NDX a fairly good day. AAPL was a star Tech performer, making a new record high, closing at 144.12.

The averages moved slowly higher through the session and ended the day mixed, with the DJIA the only major index finishing in the red. The DJIA and SPX were little changed on very weak volume. The NDX ended moderately higher with a new record close.

At the close, the DJIA lost 42.1 points, the SPX added 2.5 points, and the NDX gained 0.43%. Breadth was positive, 1.9 to 1, on weak volume. ROC(10)’s declined, with the NDX the only major index remaining in positive territory.

RSI’s were little changed, with the NDX continuing to be the leader at 65.2. The DJIA slipped to 47.8, while the SPX sits at 53.5. All three major averages remain with their MACD below signal. The ARMS index ended the day at 0.97, a neutral reading.

It was a lackluster session with the averages moving very little on dismal volume. The star of the day was the NDX, which closed at a new high of 5430. During the session it traded as high as 5433, which was 6 points below its recent intraday high. The NDX traded right to the top of its Bollinger Band of 5432 during the session. It remains above its 20D-SMA of 5380.

The SPX, which inched out a small gain, closed just 4 points below its 20D-SMA of 2365. The DJIA also continues below its 20D-SMA of 20821. While the NDX moved to new highs, the DJIA and SPX continue to consolidate before the next move up. IWM (small-caps) was up 0.32% to 136.23, giving credence to the decent breadth that we had in the session. The VIX was down 0.75% to 11.44.

Near term support for the NDX is at 5425 and 5400. Near term resistance is at 5432 and 5450. Near term support for the SPX is at 2350 and 2335. Near term resistance is at 2365 and 2375.

Europe is mixed in early trade Thursday, while U.S. Futures are slightly lower in the premarket. We’ll see a few important pieces of economic data released today, including GDP numbers at 8:30am, Initial/Continuing Jobless Claims at 8:30am, and Natural Gas Inventories at 10:30am.

The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) was unchanged in premarket trading Thursday. Year-to-date, DIA has gained 4.46%, versus a 5.37% 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 #5 of 74 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.

About the Author: Dave Chojnacki

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.


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