Terrific Jobless Claims and Retail Sales reports set the stage for equities at the open. The major indices vaulted to the upside at the open. In addition to good economic numbers, the ECB announced that they would not be raising rates, but they will begin to end their asset purchase program in September and shut it down completely in 2019.
This was good news for the US dollar, as it ended higher on the day. The Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) reversed their course after the first hour of trading and then moved sideways for the remainder of the session. The Nasdaq 1oo (NDX) was much stronger, as it not only benefited from the Techs, but also possible deals in the Media. This spurred by the AT&T / Warner decision. The DJIA could not hold its gains and finished negative, while the SPX eked out a small gain. The NDX continued its strength into the close, finishing with a new record high.
At the close, the DJIA fell 25.8 points, the SPX added 6.8 points, and the NDX gained 1%. Breadth was slightly positive, 1.3 to 1, on above average volume. ROC(10)’s advanced, with all three major averages remaining in positive territory. RSI’s were mixed, with the NDX ending at 73 and leading the other indices. The DJIA slipped to 58.5 and the SPX finished at 63.6. MACD’s remain above signal for all three averages. The ARMS index ended the day at 1.29, a slightly bearish reading.
Once again, the NDX was the stellar index moving to a new record closing high of 7279 and an intraday record of 7291. It continues well above its 20D-SMA of 24907. It is becoming slightly overbought with an RSI of 73. The DJIA closed at 25175, continuing to hold above its 50% retrace level of 25074. It is also comfortably above its 20D-SMA of 24907. The SPX ended at 2782, continuing to find resistance near the 2788-2789 levels. The SPX continues above its 20D-SMA of 2743. The VIX ended the day at 12.12, down 6.3%. Volatility continues very low. We get Options Expiration today.
Near term support for the NDX is at 7250 and 7200. Near term resistance is at 7291 and 7300. Near term support for the SPX is at 2750 and 2743. Near term critical resistance is at 2788-89 and 2800. Europe is lower in early trade. U.S. Futures are pointing lower pre-market.
Major economic reports on tap today include Empire State Manufacturing at 8:30am, Industrial Production at 9:15am, Consumer Sentiment at 10:00am, and Options Expire Today.
The SPDR Dow Jones Industrial Average ETF (DIA) fell $1.48 (-0.59%) in premarket trading Friday. Year-to-date, DIA has gained 2.71%, versus a 4.87% 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 StreetOne Technical Analysis. In addition, he is Portfolio Manager for Sabretooth Advisors.
Dave develops 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.
Prior to joining StreetOne Technical Analysis, Dave designed and developed I/T Systems for the Insurance and Financial Industries.