On a half day of Holiday trading on Friday, equities moved higher right from the open. Once again, Techs took the lead and pushed the Nasdaq 100 (NDX) to the best gains for the day. By the close, the NDX and S&P 500 (SPX) moved to new record highs. The Dow Jones Industrial Average (DJIA) also registered small gains, but was unable to hit new highs.
In the shortened week, we saw all three major indices make record highs as they pulled out of a two week trading range. At the close on Friday, the DJIA was up 31.8 points, the SPX gaining just 5.3 points, and the NDX added 0.36%. Breadth was positive, 1.5 to 1, on half-day trading volume. RSI’s moved higher, with the NDX finishing at 70.9, moving into overbought territory. The DJIA and SPX are in the lower 60’s.
The DJIA ROC(10) crossed back into positive territory, joining the other 2 major indices. The ARMS Index ended at 1.06, a neutral reading at the close.
For the week: the DJIA was up 0.8%, the SPX gained 0.9%, and the NDX added 1.5%. The VIX finished at 9.67, down 15% for the week. We’ll get Housing and Manufacturing data this week.
Long term, the upside bias continues. The major indices broke out of a trading range last week to set new record highs. The SPX hit the 2600 level for the first time. While we registered new highs, equities were missing the typical strong volume, which tends to coincide with moving into record territory. The Major indices are several percentage points above their 200D-SMA: DJIA-8.7%, SPX-6.3%, NDX-10.9%.
Short term the major averages continue strong. The major averages are comfortably above 6 month lows. Near term, the major indices are above their 50D-SMA’s, which are providing critical near term support: DJIA-23033, SPX-2555, NDX-6134. The NDX had its MACD cross above signal, as it is the strongest index near term.
Europe is slightly lower in early trade Monday, while U.S. Futures are flat in the premarket. The only major economic report on tap today is New Home Sales at 10:00am.
The SPDR Dow Jones Industrial Average ETF (DIA) fell $0.22 (-0.09%) in premarket trading Monday. Year-to-date, DIA has gained 21.00%, versus a 17.55% 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.