Dow Jones Industrial Average Looking Up To Start The Week

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October 29, 2018 8:21am INDEXDJX:.DJI NYSE:DIA

Market technician Dave Chojnacki of StreetOne Technical Analysis dives into the underlying technicals for the major U.S. averages.

Friday was all about GOOG and AMZN beating earnings on the bottom line, but missing on the top.   Investors are concerned that this may be the last of good earnings. The over-all economy is not slowing, as GDP came in at 3.5%.   Is this too hot that rates will continue to rise? The Market is trying to sort all this out, but in the meantime they are taking money off the table.   The major indices fell significantly on Friday, with Techs taking a big hit. AMZN was down 7.8% and GOOG fell 2.2%. The NDX was the weakest index in Friday’s session.    For the week, the DJIA gave up 2.9%, the SPX fell 3.9%, and the NDX lost 3.5%. The 10YR ended the day at 3.08.                          

At the close on Friday, the DJIA was down 1.1%, the SPX fell 1.7%, and the NDX gave up 2.3%.   Breadth was decidedly negative, 2.6 to 1, on heavy volume. ROC(10)’s declined in the session, with the NDX crossing back into negative territory.  The DJIA and SPX remained in negative territory. RSI’s moved lower, with the SPX the lowest at 30.4. The DJIA ended at 34.8 and the NDX 36.2. All three major indices remain with their MACD below signal.   The ARMS index ended the day at 1.08, a neutral reading at the close.

The major indices continued to lose ground on Friday as they all closed below their 200D-SMA and below their 50WK-SMA.  All three major averages traded as low as their lower Bollinger Band®. Technicals are weak in all time-frames. Confidence in equities will need to build before reversing to the upside.  The DJIA closed at 24688, below its 200D-SMA of 25148 and its 50WK-SMA of 25019. Its lower Bollinger Band® is at 24314. The NDX ended Friday at 6852. It is below its 200D-SMA of 7065 and its 50WK-SMA of 6954.   The NDX is below its 61% Fibonacci retrace level of 6917. Its lower Bollinger band is at 6733. The SPX closed at 2658, below its 200D-SMA of 2767. It remains below its 50WK-SMA of 2748. During the session it traded just near its lower Bollinger Band® of 2631.  The VIX finished down just 0.25% to 24.16. For the week, the VIX gained 21.4%.

Near term support for the NDX is at 6750 and 6733. Near term resistance is at 7000 and 7065. Near term support for the SPX is at 2600 and 2553. Near term resistance is at 2696 and 2725.  Investors will be waiting for the Employment Report at the end of this week.

Europe is higher in early trade Monday, and U.S. Futures are significantly higher premarket. Major economic reports on tap today include Personal Income/Spending at 8:30am and Inflation at 8:30am.

The SPDR Dow Jones Industrial Average ETF (DIA) rose $2.52 (+1.02%) in premarket trading Monday. Year-to-date, DIA has gained 0.49%, versus a -0.17% 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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