While Job Claims numbers were disappointing on Thursday morning, investors were focused on the House passing the Tax Plan. With additional Economic numbers meeting expectations and positive thoughts on the Tax cut, equities reversed their two-day slump.
All three major indices moved higher in the session, as volume also improved. Big Techs were leading the way, helping the Nasdaq 100 (NDX) to strong gains. The Tax Plan passed the House, and the averages coasted into the close, just off their highs of the day.
At the close, the Dow Jones Industrial Average (DJIA) added 0.8%, the S&P 500 (SPX) moved up 0.82%, and the Nasdaq 100 (NDX) spiked 1.3%. Breadth was decidedly positive, 3 to 1, on above average volume. ROC(10)’s advanced in the session, with the DJIA the only average in negative territory. The SPX crossed back positive, to join the NDX. RSI’s moved higher, with the NDX continuing to lead at 67.3. The DJIA ended at 61.7 and the SPX at 59.3. MACD’s remain below signal for all three major indices.
The ARMS index ended the day at 1.17, indicating the weakness late in the session. It was a nice bounce after the two day pullback, but will it last? Negative MACD’s remain a near term concern.
The DJIA and SPX did move back above their 20D-SMA’s of 23427 and 2578, respectively. The DJIA closed at 23458, holding above its lower Bollinger Band® of 23254.
The NDX had a big day closing at 6339. It traded at a new intraday high of 6352 and remains comfortably above its 20D-SMA of 6231. The SPX closed at 2585, just 9 points below its all-time high of 2594. Its upper Bollinger Band sits at 2598. Critical near term support remains at its 50D-SMA of 2545.
The VIX fell dramatically to 11.76, a 10.4% drop.
Near term support for the NDX is at 6325 and 6300. Near term resistance is at 6345, 6352 and 6375. Near term support for the SPX is at 2578 and 2562. Near term resistance is at 2594, 2597 and 2600.
Europe is higher in early trade Friday, while U.S. Futures are mixed in the premarket. The only major piece of economic news out today will be Housing Starts at 8:30am.
The SPDR Dow Jones Industrial Average ETF (DIA) fell $0.03 (-0.01%) in premarket trading Friday. Year-to-date, DIA has gained 20.71%, versus a 16.77% 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.