Dow Jones Industrial Average Fails To Recapture 200-Day Moving Average

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June 27, 2018 8:11am INDEXDJX:.DJI NYSE:DIA

Market technician Dave Chojnacki of StreetOne Technical Analysis recaps Tuesday’s muted market action and updates the important technical levels to focus on for the major U.S. Averages.

After a big down day on Monday, equities attempted to bounce off their lows.  The major indices opened slightly higher on Tuesday, with analysts still concerned with Trade.  The S&P 500 (SPX) and Dow Jones Industrial Average (DJIA) struggled during the session to stay in positive territory and traded in a very narrow range throughout the session.   The DJIA closed below its 200D-SMA on Monday and was having difficulty holding above that level. The tech sector was a bit stronger on Tuesday and helped the Nasdaq 100 (NDX) to finish as the strongest sector in the session.  The DJIA and SPX closed a few points higher on the day. The 10YR. ended the day at 2.88%.

At the close, the DJIA added 30.3 points, the SPX inched up 5.9 points, and the NDX moved up 0.43%.  Breadth was positive, 1.5 to 1, on below average volume. ROC(10)’s advanced in the session, with all three major averages in negative territory.  RSI’s moved slightly higher, with the NDX continuing to be the strongest at 47.5. The DJIA ended at 37.3, the weakest and the SPX finishing at 43.7.  The ARMS index ended the day at 0.99, a neutral reading.

The major indices bounced off their prior session’s lows, but the DJIA was unable to close above its 200D-SMA of 24292.  The DJIA closed at 24283, remaining a couple hundred points below its 50D-SMA of 24651. It also continues below its 50% retrace level of 25074.   

The NDX continues to be the strongest index closing at 7068. It did close below its 20D-SMA of 7162. The NDX remains above its 50D-SMA of 6945.  In order for the NDX to resume its rally, it needs to get above that 20D-SMA level. The SPX closed at 2723, unable to get above its 50% retrace level of 2726.   It closed right at its 50D-SMA of 2723. It remains below its 20D-SMA of 2756.

The VIX spiked higher on Monday, but pulled back some on Tuesday. It finished down 8.1% to 15.92.   

Near term support for the NDX is at 7000 and 6945. Near term resistance is at 7162 and 7200. Near term support for the SPX is at 2712 and 2700. Near term critical resistance is at 2726 and 2756.  

Europe is slightly higher in early trade Wednesday, and U.S. Futures are pointing lower in the premarket. Major economic reports on tap today include Durable Goods at 8:30am and Pending Home Sales at 10:00am.

The SPDR Dow Jones Industrial Average ETF (DIA) fell $1.24 (-0.51%) in premarket trading Wednesday. Year-to-date, DIA has declined -1.09%, versus a 2.18% rise in the benchmark S&P 500 index during the same period.

DIA currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #3 of 81 ETFs in the Large Cap Value ETFs category.

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.

About the Author: Dave Chojnacki

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.

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