The major indices opened in the black on Tuesday, attempting to recover from Monday’s significant losses. Social media was still taking a beating, with FB down 2.5% and TWTR down 10% on the day. The Nasdaq 100 (NDX) managed to finish with a small gain, however, as the rest of tech was recovering nicely from the prior day’s losses.
The major averages traded in a very narrow range, with the Dow Jones Industrial Average (DJIA) finishing with a moderate gain. The S&P 500 (SPX) traded in 14 point range and ended with a small gain. At the close, the DJIA was up 0.47%, the SPX added 0.15%, and the NDX gaining 0.31%. Breadth was slightly negative, 1.3 to 1, on below average volume. ROC(10)’s declined for the NDX and SPX, as they remained in negative territory. The DJIA advanced in the session, but remained in negative territory.
RSI’s rose in the session, with the NDX the strongest at 49.8. The DJIA finished at 45.6 and the SPX moved up to 46.6. The SPX had its MACD cross below signal, joining the DJIA and NDX. The ARMS index ended the day at 0.92, a fairly neutral reading.
We have to look at yesterday as a positive day, after the Tech wreck of the prior session, however, the lack of volume showed little conviction to the move. The DJIA was the best performer on the day, closing at 24727. It remains below its 20 and 50D-SMA’s of 24962 and 25289, respectively. Critical near term support remains at 24217.
The NDX ended the day at 6885, continuing to be the best performing index near term. It continues above its 20D and 50D-SMA’s of 6820 and 6926, respectively. Near term critical support for the NDX is at 6645. The NDX has held up fairly well, given the hits to FB and TWTR.
‘The SPX closed at 2716, below its 20 and 50D-SMA’s of 2734 and 2748, respectively. Near term critical support is now at 2647. The VIX fell 4.3% to 18.20.
Near term support for the NDX is at 6850 and 6820. Near term resistance is at 6900 and 6926. Near term support for the SPX is at 2700 and 2675. Near term resistance is at 2734 and 2748.
Europe is trading mostly lower in early Wednesday actions, while U.S. Futures are mixed in the premarket. Major economic reports on tap today include Existing Home Sales at 10:00am, EIA Oil Report at 10:30am, and the all-important FOMC Announcement at 2:00pm.
The SPDR Dow Jones Industrial Average ETF (DIA) rose $0.14 (+0.06%) in premarket trading Wednesday. Year-to-date, DIA has declined -0.11%, versus a 1.53% 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.
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Prior to joining Street One, Dave designed and developed I/T Systems for the Insurance and Financial Industries.