For the second day in a row, futures were up significantly premarket yesterday, and equities jumped higher at the open. Like Tuesday, the VIX was also moving higher, diverging from equities. We began to see the major averages reversing at one point and it looked like we were in for a mirror image of Tuesday’s market.
Then the VIX began moving lower and equities reversed. Apple’s new investment announcement and $38 Billion repatriation was the final kicker to push the major indices into new record highs. The averages finished with significant gains.
At the close, the Dow Jones Industrial Average (DJIA) moved up 1.25%, the S&P 500 (SPX) added 0.94%, and the Nasdaq 100 (NDX) gained 1%. Breadth was decidedly positive, 2 to 1, on above average volume. ROC(10)’s were mixed, with the NDX the only index declining. All three major indices remain in positive territory.
RSI’s moved higher, with the DJIA continuing to lead at 88.4. The SPX finished at 81.3 and the NDX at 77.8. They remain in overbought territory. All three MACD’s continue above signal. The ARMS index ended at 0.87, a slightly bullish reading.
Wednesday started like Tuesday, but unlike Tuesday was able to move higher into the close and register new record highs. The DJIA closed at a record 26115 and traded as high as 26130 in the session. It remains above its upper Bollinger Band® of 25962. Its 20D-SMA is at 25116. The SPX closed above 2800, at 2802, for a new high. It closed just 1 point above its upper Bollinger Band. Its 20D-SMA is at 2719.
The NDX closed at 6810 and traded as high as 6820 in the session. Its 20D-SMA is at 6573. It met resistance in the session at its upper Bollinger band of 6821. The VIX added 2.1% to finish at 11.91.
Near term support for the NDX is at 6800 and 6775. Near term resistance is at 6821 and 6825. Near term support for the SPX is at 2800 and 2775. Near term resistance is at 2812 and 2825.
Europe is higher in early trade Thursday, while U.S. Futures are mixed in the premarket. Major economic reports on tap today include Industrial Production at 9:15am, Housing Market Index at 10:00am, and Fed Beige Book at 2:00pm.
The SPDR Dow Jones Industrial Average ETF (DIA) rose $0.07 (+0.03%) in premarket trading Thursday. Year-to-date, DIA has gained 5.54%, versus a 4.78% 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.