Stock Market Summary – Monday, 11/05/2018

Market technician Dave Chojnacki of StreetOne Technical Analysis

A strong Employment Report had the DJIA and SPX moving higher at the open on Friday.   250,000 jobs were added in October and wages are moving up 3.1%. The NDX did not open higher as a disappointing earnings report from AAPL had it trading lower and dragging down the NDX.  Since AAPL is in so many indices and ETF’s it held back the over-all market on Friday. All the major averages eventually turned to the downside on Friday and the major indices finished with moderate to significant losses.   The major indices had three good sessions prior to Friday, but Friday was disappointing, as it came on an increase in volume. For the week, the DJIA added 2.3%, the SPX moved up 2.4%, and the NDX gained 1.6%. The 10YR ended the day at 3.21.                                                                                       

At the close on Friday, the DJIA was down 0.43%, the SPX slipped 0.63%, and the NDX lost 1.4%.    Breadth was slightly negative, 1.3 to 1, on above average volume. ROC(10)’s declined in the session, with the DJIA crossing into negative territory.   The NDX and SPX declined and remained in negative territory. RSI’s moved lower, with the DJIA now leading at 47.2. The SPX finished at 43.5 and the NDX at 44.1.  All three major indices had their MACD cross above signal. A positive near term technical indication. The ARMS index ended the day at 0.98, a neutral reading at the close.    

Equities had a good week attempting to recover from the recent sell-off.   RSI’s have been rising since the second week of October indicating that the major indices are slowly building internal strength.  They SPX and NDX still remain below their 50WK-SMA’s of 2751 and 6967, respectively. The DJIA closed at 25270, above its 200D-SMA of 25124.  It remains below its 20D-SMA of 25316. It does remain above its 50WK-SMA of 25058. The NDX ended at 6965, below its 200D-SMA of 7068. It also remains below its 20D-SMA of 7053.   The NDX is back below its 50% retrace level of 7059. The SPX finished at 2723 on Friday, below its 20D-SMA of 2748. It also continues below its 200D-SMA of 2764 and its 50% retrace level of 2755.  The VIX finished at 19.51, up 0.88%. Near term support for the NDX is at 6850 and 6816. Near term resistance is at 7053 and 7068. Near term support for the SPX is at 2700 and 2685. Near term resistance is at 2748 and 2764.  Europe is higher in early trade. US Futures are slightly higher premarket.

The SPDR Dow Jones Industrial Average ETF Trust WATCH LIST CREATE DIA (DIA) was trading at $253.88 per share on Monday morning, up $1.42 (+0.56%). Year-to-date, DIA has gained 3.48%, versus a 2.60% 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.