Investors got mixed economic numbers as they returned from a long holiday weekend. The IMS Index came in a little better than expected, while Construction Spending was down. This resulted in the major averages moving in a roller coaster motion through the session. The NDX and SPX are still consolidating their recent record highs. Volume moved higher in the session, while prices changed very little by the final bell. All three major averages ended slightly lower. The 10YR moved higher in the session, back to 2.90%.
The Dow Jones Industrial Average (DJIA) fell just 12.3 points, the SPX inched down 4.8 points, and the NDX gave up 0.42%, the biggest loser. Breadth was decidedly negative, 2 to 1, on above average volume. ROC(10)’s were lower across the board, but remained in positive territory. RSI’s moved lower, with the leading NDX down to 65.9. The SPX finished at 64.1 and the DJIA ended at 61.7. MACD’s for all three major indices remain above signal. The ARMS index ended the day at 1.14, a slightly bearish reading at the close.
Yesterday’s loss for the DJIA was the third in a row. It closed at 25952, remaining strong technically and above its 20D-SMA of 25690. The NDX and SPX continue to consolidate, but near term technicals remain strong. The NDX closed at 7622, just 38 points below its recent closing high of 7660. It continues above its 20D-SMA of 7478, which should provide near term critical support. The SPX closed at 2896, just below the 2900 level. It is above its 20D-SMA of 2864 and just 20 points below last week’s intraday high of 2916. The SPX 50D-SMA is now at 2817. The VIX finished up 2.3% to 13.16.
Near term support for the NDX is at 7500 and 7478. Near term resistance is at 7660 and 7700. Near term support for the SPX is at 2875 and 2864. Near term critical resistance is at 2914 and 2925.
Europe is lower in early trade Wednesday, while U.S. Futures are lower pre-market. The only major piece of economic news due out today is Trade Deficit at 8:30am.
The SPDR Dow Jones Industrial Average ETF (DIA) fell $0.65 (-0.25%) in premarket trading Wednesday. Year-to-date, DIA has gained 5.87%, versus a 9.04% 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.