New Highs Just Out Of Reach For The Dow Jones Industrial Average

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September 12, 2017 8:29am INDEXDJX:.DJI NYSE:DIA

Technical analyst Dave Chojnacki of Street One Financial recaps Monday’s big equities rally that saw new all-time highs for a couple of major U.S. averages, and previews Tuesday’s action with an update of the important technical levels to watch out for.

Some relief that North Korea didn’t fire another missile and Hurricane Irma not as catastrophic as forecast had investors piling into equities at the open on Monday. Strength was across the board, and the rally lasted through the entire session.

The Nasdaq 100 (NDX) and  S&P 500 (SPX) traded above their record closing highs, but only the SPX managed to close at a new high. All three major indices registered significant gains in the session, as volume continued above average.

At the close, the Dow Jones Industrial Average (DJIA) added 1.2%, the SPX gained 1%, and the NDX was up 1.1%. Breadth was decidedly positive, 3.5 to 1, on above average volume. ROC(10)’s advanced, with all three major indices in positive territory.

RSI’s also moved higher, with the SPX now the strongest at 62. The NDX finished at 58.9 and the DJIA at 60.5. The NDX and SPX remain with their MACD above signal. The DJIA continues below. The ARMS index ended the day at 0.87, a slightly bullish reading.

The gains were strong throughout the session, as the major indices strengthened their near term technicals. The DJIA finally pushed above its 20D-SMA of 21857, closing at 22057. It remains just below its record closing high of 22118. The DJIA closed just below its Bollinger Band® top of 22075. The NDX briefly traded above its record closing high of 5988 in the session, but retreated to close at 5980. It remains comfortably above near term moving averages. It is just below its Bollinger Band® top of 6021.

The SPX closed at a new high of 2488, its high of the session. It was just 2 points below its all-time intraday high of 2490. It closed 1 point above its Bollinger Band® top of 2487 and above its trend-line of 2470.

The GLD (SPDR Gold)fell 1.4% to 126.19, as the flight to safety waned amid the equities rally. Meanwhile, the VIX crashed 11.5% to 10.73.

Near term support for the NDX is at 5975 and 5950. Near term resistance is at 5988 and 6000. Near term support for the SPX is at 2475 and 2470. Near term resistance is at 2490 and 2500.

Europe is higher in early trade Tuesday, and U.S. Futures are also pointing higher in the premarket. The only major economic report on tap today is the JOLTS Job Openings at 10:00am.

The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) rose $0.58 (+0.26%) in premarket trading Tuesday. Year-to-date, DIA has gained 13.44%, versus a 12.52% 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 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.

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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