China got U.S. Futures off to a good start yesterday morning and equities gapped up at the open. China’s willingness to reduce certain tariffs and work with the U.S. on trade alleviated some of the recent trade fears.
Techs were strong out of the gate and continued that strength throughout the session, pushing the Nasdaq 100 (NDX) to be the best gainer of the day. Most sectors were up on the day, and the Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) ended with significant gains.
While the major indices finished strong, volume did not lend conviction to the move. At the close, the DJIA was up 1.7%, the SPX added 1.6%, and the NDX gained 2.2%. Breadth was decidedly positive, 3 to 1, on below average volume. ROC(10)’s declined in the session, with the SPX crossing back into negative territory. The DJIA remained in positive territory and the NDX continued in negative territory.
RSI’s moved higher, with the DJIA the strongest at 50.1. The NDX finished at 47.9 and the SPX at 48.7. The SPX MACD crossed above signal, joining the DJIA. The NDX continues with its MACD below signal. The ARMS index ended the day at 0.47, a bullish reading.
The major indices got off to a strong start on Tuesday and managed to hold that strength though the duration of the session. The DJIA closed at 24408, moving above its 20D-SMA of 24293. It remains below its 50D-SMA of 24766. We will look for the recent high of 24622 to provide resistance.
The SPX met resistance at its 20D-SMA (2664) in the session and ended the day at 2656. It continues below its 50D-SMA of 2700. The fact that its MACD crossed above signal is a strong near term technical sign.
The NDX closed at 6615, continuing below its 20D-SMA(6689) and its 50D-SMA(6750). The VIX fell 5.9% to finish at 20.47. It continues to remain fairly high.
Near term support for the NDX is at 6600 and 6550. Near term resistance is at 6689 and 6750. Near term support for the SPX is at 2625 and 2612. Near term resistance is at 2664 and 2700.
Europe is trending lower in early trade Wednesday, while U.S. Futures are significantly lower in the premarket. Major economic reports on tap today include CPI at 8:30am, the EIA Petro Report at 10:30am, and the FOMC Minutes at 2:00pm.
The SPDR Dow Jones Industrial Average ETF (DIA) fell $2.28 (-0.93%) in premarket trading Wednesday. Year-to-date, DIA has declined -1.36%, versus a -0.64% 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.