Technical analyst Dave Chojnacki recaps Wednesday’s mixed market action, which saw the Nasdaq’s recovery continue, largely based on a big bullish move by Apple.
Weakness in PPI and Industrial Production numbers left equities moving lower at the open yesterday. Once again, we saw the major indices moving in different directions. This time we saw the SPX and DJIA pulling back slightly, while the NDX was bouncing, continuing the prior session’s strength.
AAPL up 2.69% lifted the NDX to moderate gains for the day. The DJIA and SPX attempted to get into positive territory during the PM hours, but in the last hour fell back to register small losses. At the close, the DJIA fell 0.29%, the SPX slipped 0.16%, and the NDX added 0.58%. Breadth was slightly positive, 1.1 to 1, on average volume.
ROC(10)’s advanced, with the NDX crossing into positive territory, joining the DJIA and SPX. RSI’s were mixed with the NDX moving higher and the DJIA and SPX slightly lower. The DJIA continues to be the strongest, with an RSI of 70.5. The NDX also saw its MACD cross above signal, joining the other major indices. The ARMS index ended the day at 1.93, a rather bearish reading.
The strength in the NDX, helped by AAPL, helped the index move toward near term technical strength parity with the other 2 major indices. It moved above its 20D-SMA of 4789, but remains below its 50D-SMA of 4811. The DJIA did some consolidation yesterday and it was the first session in 5 that it did not establish a new high. It remains the strongest of the big 3 indices near term.
The SPX pulled back some yesterday, but still remains just 14 points from its all-time closing high of 2190. It is comfortably above its near term critical support of 2147. The Dow Transports have also displayed strength recently and are at their highest(8844) since early 2015. The VIX added 2.6% to finish at 13.72. Near term support for the NDX is at 4789 and 4775. Near term resistance is at 4811 and 4825. Near term support for the SPX is at 2175 and 2162. Near term resistance is at 2190, 2193 and 2200.
Europe is mixed in early trade, while US Futures are pointing slightly higher in the pre-market.
Along with key earnings releases from Walmart, Best Buy, and J.M. Smucker, it’s also a packed day for economic reports. Today well see the CPI numbers released at 8:30am, Housing Starts/Building Permits at 8:30am, Continuing Claims at 8:30am, Philadelphia FED at 8:30am, and Natural Gas Inventories at 10:30am.
The PowerShares QQQ Trust, Series 1 (ETF)(NASDAQ:QQQ) was mostly flat in premarket trading Thursday at $116.90 per share. Year-to-date, the largest fund tied to the Nasdaq 100 index has gained 4.51%.
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 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.