Dow Jones Industrial Average Rally Streak Ends At Seven

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November 10, 2017 9:05am INDEXDJX:.DJI NYSE:DIA

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Market technician Dave Chojnacki of Street One Financial wraps up the trading week with a deep dive into the technicals behind the major U.S. averages, which finally suffered a much-needed pullback yesterday.


Equities opened lower Thursday, despite economic reports meeting expectations. The major indices were at overbought levels and a healthy pullback was expected.

Comments from Washington spooked the market late morning, as the mention that the Corporate Tax cuts may not take place till 2019 sent equites free falling. The Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) traded just below the key 20 day moving average before finding support and then bouncing to the upside.

By the end of the session, all three major averages recovered a good portion of their losses, but still finished in the red. At the close, the DJIA was down 0.43%, the SPX fell 0.38%, and the Nasdaq 100 (NDX) gave up 0.53%. Breadth was negative, 1.6 to 1, on above average volume. ROC(10)’s declined in the session for all three major indices. They remain in positive territory.

RSI’s moved lower in the session, and now the NDX is the strongest at 70.6. The DJIA ended at 68.2 and the SPX fell to 63.8. The SPX MACD crossed back below its signal, once again joining the DJIA. The NDX is the only major index with its MACD above signal. The ARMS index ended the day at 0.71, a fairly bullish reading.

The major indices fell on Thursday, as they were poised for a pullback. The DJIA ended its streak of seven straight sessions to the upside. The afternoon rally kept the losses to a minimum, however. The DJIA briefly traded below its 20D-SMA (20335) to 23310. It closed at 23461.

The SPX closed at 2584, but not before trading as low as 2566 in the session. Its 20D-SMA is at 2572. The NDX was the biggest loser in the session, closing at 6312. It traded as low as 6248, which was comfortably above its 20D-SMA of 6182. The VIX spiked 7.3% to finish at 10.50. It was as high as 12.19 in the session, however, before the afternoon rally pushed it back down again.

Near term support for the NDX is at 6300 and 6250. Near term resistance is at 6350 and 6383. Near term support for the SPX is at 2572 and 2562. Near term resistance is at 2600 and 2612.

Europe is lower in early trade Friday, while U.S. Futures are pointing moderately lower in the premarket. The only major piece of economic data coming out today is Consumer Sentiment at 10:00am.

The SPDR Dow Jones Industrial Average ETF (DIA) fell $0.26 (-0.11%) in premarket trading Friday. Year-to-date, DIA has gained 20.44%, versus a 16.34% 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 80 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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