Market technician Dave Chojnacki of Street One Financial updates the important technical levels for investors and traders to focus on in the major U.S. averages, as the indexes face some critical near-term support.
Equities got off to a decent start Wednesday, except for the Dow Jones Industrial Average (DJIA), which was hampered by IBM. IBM earnings were lower than expected and it lost 4.9% in the session. That decline pushed the DJIA lower, and it registered a moderate loss for the session.
The S&P 500 (SPX) and Nasdaq 100 (NDX) fared better, with Techs helping the NDX finish in positive territory. After a good open, the SPX then fell through most of the session, but ended with only a small loss.
It was a mixed session at best on Wednesday. At the close, the DJIA was down 0.58%, the SPX slipped 4 points, and the NDX added 7.9 points. Breadth was slightly negative, 1.15 to 1, on average volume.
ROC(10)’s declined for the DJIA and SPX and remained unchanged for the NDX. RSI’s were mixed, with the DJIA declining to 37.4, and the NDX inching up to 53.1. The SPX slipped to 43.1.
All three major averages remain with their MACD below signal. The ARMS index ended the day at 1.44, a bearish reading.
The major indices had a mixed session, with the DJIA the big loser and falling below a critical near term support level of 20412. It closed 8 points below at 20404. The DJIA and SPX continue below their 20 and 50 day moving averages. The DJIA also closed below its lower Bollinger Band® of 20462. The SPX lower BB is at 2332, and it closed above at 2338.
The DJIA and SPX did close off their lows of the session, so that’s one positive note. The SPX also remains above its critical near term support of 2322. The NDX closed below its 20D-SMA of 5402 by 3 points.
We continue to see the weakness near term for the major indices. Volume was somewhat higher in yesterday’s session, but not to a meaningful level. The IWM (iShares Russell 2000) was up 0.4% to 135.86, and the VIX added 3.2% to finish at 14.89.
Near term support for the NDX is at 5375 and 5361. Near term resistance is at 5402 and 5425. Near term support for the SPX is at 2332, 2325 and 2322. Near term resistance is at 2351 and 2355.
Europe is mixed in early trade Thursday, and U.S. Futures are pointing higher. Major economic reports on tap for today include Initial/Continuing Jobless Claims at 8:30am, the Philadelphia Fed at 8:30am, Leading Indicators at 10:00am, and Natural Gas Inventories at 10:30am.
The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) rose $0.50 (+0.25%) in premarket trading Thursday. Year-to-date, DIA has gained 3.21%, versus a 4.43% 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 Street One Financial. He provides technical support for the Street One team and also develops individual analysis for Clients as requested.
Dave is a major contributor to the ‘ETF Daily’, 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.
In addition, Dave assists with desk trading when necessary. He possesses a Series 7 and 63.
Prior to joining Street One, Dave designed and developed I/T Systems for the Insurance and Financial Industries.