Market technician Dave Chojnacki of Street One Financial kicks off the new trading week with a look at the important technical levels for investors and traders to focus on, as market volatility remains elevated and the major indexes look to end their recent losing streak.
Economic reports on Thursday came in better than expected, but equities were tempered by geopolitical events. Banks earnings were less than stellar, as most beat on the bottom line, but the top line was disappointing.
The major indices were flat till noon, when they then started to the downside, falling through the afternoon hours. The averages ended with their 3rd straight loss in a holiday shortened week. At the close, the Dow Jones Industrial Average (DJIA) fell 0.67%, the S&P 500 (SPX) off 0.68%, and the Nasdaq 100 (NDX) was down 0.44%.
ROC(10)’s declined in the session for all three major indices, and they remained in negative territory. RSI’s moved lower, with the DJIA and SPX moving into the 30’s. The NDX remains the strongest at 42.7.
For the week, the DJIA fell 0.9%, and the SPX and NDX gave up 1.1%. The VIX rose every day last week, ending up 1.2% on Friday to 15.96. For the week, the VIX gained a massive 24%. The VIX is finally beginning to reflect the Geopolitical risks.
Long term, the upside bias continues, but last week we saw all the major averages moving to the downside. While we remain above key long term technical levels, the major indices are approaching their 20 Week moving averages: DJIA-20260, NDX-5172, SPX-2309.
Short term, we had the DJIA and SPX breaking below their 20 and 50D moving averages during the week. DJIA-20D-20668, 50D-20655, SPX- 20D-2354, 50D-2351. They continue above their 50% retracement levels, but short term upside bias is now being challenged.
Near term, the bias is turning to the downside. The NDX fell below its 20D-SMA of 5400. RSI’s and MACD’s continue weak near term for all 3 major indices, with critical near term support at DJIA-20412, SPX-2322, NDX-5316.
Europe is lower in early trade Monday morning, and U.S. futures are slightly lower. Earnings reports will continue this week, and we’ll also get some key housing data as well. Major economic reports due out today include the Empire Manufacturing data at 8:30am and the NAHB Housing Market Index at 10:00am.
The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) rose $0.28 (+0.14%) in premarket trading Monday. Year-to-date, DIA has gained 3.47%, versus a 4.02% 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.