Dow Jones Industrial Average Can’t Hold Onto New Highs

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October 10, 2017 8:08am INDEXDJX:.DJI NYSE:DIA

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Technical analyst Dave Chojnacki of Street One Financial recaps Monday’s small pullback for the U.S. averages and updates the key technical levels to focus on as we progress through what could be an anemic week for stocks.


With no major economic reports or news to push the market, equities opened slightly to the down side. It was a slow start to the new week, as Banks and Bonds trading were closed for the Columbus holiday. The major averages were lethargic and moved in a narrow range on light volume.

The Nasdaq 100 (NDX) and Dow Jones Industrial Average (DJIA) at one point hit new intraday highs. They were unable to hold those gains, however, and closed with a small loss. The SPX also finished with a small decline for the day.

It was the second straight loss for the DJIA and SPX. At the close, the DJIA fell 12.6 points, the SPX slipped 4.6 points, and the NDX gave up just 6 points. Breadth was negative, 1.2 to 1, on light volume.

ROC(10)’s advanced in the session and all three major indices remained in positive territory. RSI’s were slightly lower, with the DJIA remaining the strongest at 78.1. The NDX finished at 64.4 and the SPX at 72.2. MACD’s remain above signal for all three major indices. The ARMS index ended at 1.24, a slightly bearish reading.

We noted that the NDX hit a new intraday high of 6078, but could not hold that into the close. The high was one point above its upper Bollinger Band® of 6077. The NDX remains comfortably above its 20D-SMA of 5976.

It was the second straight loss for the DJIA, but it also hit a new intraday high of 22803. Its upper Bollinger Band sits at 22818. It remains well above its 20D-SMA of 22422.

The SPX closed at 2544, its second straight small loss. Its upper Bollinger Band is now at 2552, which happens to be the record high established last week. The SPX 20D-SMA is now at 2514. Near term critical support is at 2488.

The VIX spiked up 7% to finish at 10.33. It has bounced strongly off of last week’s near record low levels.

Near term support for the NDX is at 6050 and 6025. Near term resistance is at 6075 and 6100. Near term support for the SPX is at 2537 and 2525. Near term resistance is at 2550, 2552 and 2562.

Europe is mixed in early trade Tuesday, while U.S. Futures are slightly higher in the premarket. There are no major economic reports on tap for today, so traders will need to look elsewhere for potential catalysts.

The SPDR Dow Jones Industrial Average ETF (DIA) was unchanged in premarket trading Tuesday. Year-to-date, DIA has gained 16.92%, versus a 14.66% 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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