As expected, September’s Employment Report was impacted by the hurricanes. If you look inside the numbers, however, it was not a bad report. The major indices were a bit lethargic on Friday after several days of new record highs. Healthy consolidation is positive for a continued strong market.
The Nasdaq 100 (NDX) was the only major average able to close with a small gain, and a new high. The Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) closed with minimal losses. Volume was the lowest of the week.
At the close, the DJIA slipped 1.7 points, the SPX inched down 2.7 points, and the NDX added 7.4 points. Breadth was negative, 1.8 to 1, on below average volume.
ROC(10’s) were mixed, with the SPX declining and the DJIA and NDX advancing. The DJIA leads all with an RSI of 79.4. The SPX is at 76 and the NDX at 65.5. The ARMS Index ended at 0.96, a nearly neutral reading.
For the week: the DJIA was up 1.6%, the SPX added 1.1%, and the NDX gained 1.4%. The VIX ended up 0.14 for the week to 9.65, despite the big equity gains.
Economic reports are light this week, so other factors will be taking center stage to push equities around.
Long term, the upside bias for the markets continues. All three major indices made new highs last week. The key averages continue well above their 200D-SMA’s: DJIA- 21097, SPX-2396, NDX-5578.
Short term, the major indices continue to keep the upside bias intact. Since the July low, the DJIA is up 7%, the SPX is up 5.8%, and the NDX up 8.6%. They major indices remain above key short term moving averages. Near term, the upside bias is strong, but the DJIA and SPX are becoming a bit overbought. Both have RSI’s in their upper 70’s. Near term critical support is now at: DJIA-22219, SPX-2488, NDX-5839. With the averages somewhat extended, we can see a near term pullback of 2.5%.
Europe is lower in early trade, while U.S. Futures are pointing higher in the premarket. Note that with today being Columbus Day, banks are closed, and there are no economic reports on tap for today.
The SPDR Dow Jones Industrial Average ETF (DIA) rose $0.25 (+0.11%) in premarket trading Monday. Year-to-date, DIA has gained 16.93%, versus a 14.85% rise in the benchmark S&P 500 index during the same period.
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.