Good Initial Claims and Philly Fed numbers were not enough to keep equities from falling at the open on Thursday. This lasted for the first hour and then the major indices began to find a bottom. Equities began a slow move to the upside for the remainder of the session. The Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) ended with small gains, but just enough for a new record close. It was their fifth straight up day.
The Nasdaq 100 (NDX) took a bigger beating early on in the session and could not recover enough to move into the black. It closed with its second straight small loss.
At the close, the DJIA was up 5.4 points, the SPX inched up 0.84 of a point, and the NDX gave up 21.7 points. Breadth was slightly positive, on above average volume. ROC(10)’s declined in the session, but they remained in positive territory. Momentum continues to slow.
RSI’s were mixed, with the DJIA and SPX inching up. The DJIA remains the strongest at 85.4. The SPX ended at 75.4, leaving it and the DJIA at overbought levels. The NDX closed at 62.9. MACD’s remain above signal for all three major indices.
The ARMS index ended at 0.91, a slightly positive reading. The DJIA and SPX closed at new highs of 23163 and 2562, respectively. They both were unable to make new intraday highs. The DJIA remains overbought, but continues well above its 20D-SMA of 22695. The SPX is slightly overbought and closed just 19 points below its upper Bollinger Band® of 2581. It continues comfortably above its 20D-SMA of 2536. Some consolidation between DJIA and SPX is expected in the near term.
The NDX closed lower for the second straight day, but remains above its 20D-SMA of 6021. The VIX slipped 0.02 of a point to close at 10.05.
Near term support for the NDX is at 6075 and 6050. Near term resistance is at 6100 and 6122. Near term support for the SPX is at 2550 and 2537. Near term resistance is at 2564 and 2581.
The Budget Bill passed the Senate, setting the way for Tax Reform. This should add a boost to equities this morning.
Europe is higher in early trade, and U.S. Futures are significantly higher in the premarket. Major economic reports today include Existing Home Sales at 10:00am and Baker-Hughes Rig count at 1:00pm.
The SPDR Dow Jones Industrial Average ETF (DIA) rose $0.93 (+0.4%) in premarket trading Friday. Year-to-date, DIA has gained 19.04%, versus a 15.49% rise in the benchmark S&P 500 index during the same period.
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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.