Technical analyst Dave Chojnacki of Street One Financial recaps yesterday’s weak market action, which came despite new all-time highs for the Nasdaq 100, and updates his key technical levels that investors and trades should pay close attention to.
Inside Thursday’s Slide And Partial Recovery
Good economic numbers helped to push the indices higher at the open on Thursday. Unfortunately equities could not hold onto that strength and drifted lower through the AM hours. Additional selling in the PM ended mid-afternoon, as the averages moved off their lows to close only slightly lower. The Nasdaq 100 (NDX) actually made a new intra-day high early in the session, before it too sold off.
Volume picked up slightly in the session, but still remained relatively subdued. At the close, the Dow (DJIA) was down 0.37%, the S&P 500 (SPX) lost 0.36%, and the NDX slipped 4.6 points. Breadth was decidedly negative, 2.75 to 1, on average volume.
ROC(10)’s declined in the session, with the SPX joining the DJIA in negative territory. The NDX remains in positive territory. RSI’s also fell, with the NDX continuing to be the strongest, with an RSI of 64.8.
MACD’s remain below signal for the DJIA and SPX and above signal for the NDX. The ARMS index ended the day at 0.81, a slightly bullish reading. The major indices continued to trade in a narrow range, and we saw additional weakening of some near term technicals. The SPX fell below its 20D-SMA of 2265 by two points. Its ROC(10) moved into negative territory indicating the slowing of momentum. It has important near term support in the 2229(50D-SMA) to 2233 area.
The DJIA remains below its 20D-SMA of 19882, but continues comfortably above its 50D(19466). The DJIA has some important near term support at 19718. The NDX hit a new intra-day high early in the session at 5078. It closed at 5051, just 8 points below its recent closing high of 5059.
The VIX was up for the third straight session, ending up 2.4% to 12.78. It closed above the 12.50 level, which has been an important support level. Near term support for the NDX is at 5050 and 5025. Near term resistance is at 5059 and 5078. Near term support for the SPX is at 2263 and 2250. Near term resistance is at 2271 and 2276.
Trump Inauguration Dominates Friday Headlines
Europe is mixed in early trade, while U.S. Futures are pointing higher in the pre-market. With no major economic data on tap today, investors and traders will focus on a slew of earnings reports released this morning, as they position themselves for Trump’s inauguration tonight.
The PowerShares QQQ Trust, Series 1 ETF (NASDAQ:QQQ) rose $0.44 (+0.36%) in premarket trading Friday. Year-to-date, QQQ has gained 3.80%, versus a 1.06% 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.