Can The Dow Jones Industrial Average Hit New Highs In September?

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September 4, 2018 1:22pm INDEXDJX:.DJI NYSE:DIA

Market technician Dave Chojnacki of StreetOne Technical Analysis kicks off the new trading week and month with a deep dive into the underlying technicals for the major U.S. averages.

The Consumer Sentiment number came in slightly better than forecast on Friday, and may have helped to push equity prices higher in the first hour.   Investors were still concerned with Canadian Trade talks, as negotiations continued. This may have put a damper on the major indices on Friday and held prices down.   AAPL and AMZN continued their moves to the upside registering new record highs. AAPL was helped by Buffett’s positive comments.

By the end of the session, which saw volume pick up, the major averages were little changed.   The Dow was slightly lower, while the SPX and NDX were slightly higher. For the week, the DJIA was up 0.6%, the SPX added 0.9%, and the NDX gained 2.2%. The NDX had one of its best August’s up 5.8%. The 10YR remains relatively stable at 2.85%.                                              

At the close on Friday, the DJIA slipped 22.1 points, the SPX inched up just 0.39 of a point, and the NDX added 11.8 points. Breadth was just slightly positive on above average volume.    ROC(10)’s were mixed with the NDX moving higher in positive territory. The DJIA and SPX declined, but remained in positive territory. RSI’s were mixed, with the NDX continuing to lead and move into overbought territory at 70.1.  The DJIA moved lower and ended at 62.2. The SPX finished at 66.3. MACD’s for all three major indices remain above signal. The ARMS index ended the day at 1.19, a slightly bearish reading at the close.

The NDX and SPX finished with small gains on Friday, as they continue to consolidate after establishing new record highs.   Near term technical indicators continue to be strong. We watch the NDX and SPX as they slowly move into overbought territory.  More upside is still anticipated. The DJIA ended the day at 25964, and remains above its 20D-SMA of 25668. The DJIA is the only index of the big three to not make a new record high in recent sessions.  The NDX continues to be the strongest of the big three and closed on Friday at 7654, just below its recent record closing high of 7660. It is comfortably above its 20D-SMA of 7469. The SPX closed at 2901, barely changed.  It continued to hold the 2900 level and is poised to test its recent intraday high of 2916. Its 20D-SMA sits at 2862. The VIX finished down 4.9% to 12.86. For the week, the VIX added 7.2%.

Near term support for the NDX is at 7500 and 7469.  Near term resistance is at 7660 and 7700. Near term support for the SPX is at 2875 and 2862. Near term critical resistance is at 2914 and 2925.

The SPDR Dow Jones Industrial Average ETF (DIA) was trading at $258.97 per share on Tuesday afternoon, down $0.88 (-0.34%). Year-to-date, DIA has gained 5.56%, versus a 8.83% 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 #4 of 82 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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