Market technician Dave Chojnacki of StreetOne Technical Analysis kicks off the new trading week with a deep dive into the underlying technicals for the major U.S. averages.
The Employment Report on Friday was a little weaker than expected. Manufacturing jobs continue to look strong, however, suggesting strength in better paying jobs. The major indices opened slightly higher off these numbers and gradually increased over the day. The Dow Jones Industrial Average (DJIA) was the best performer in the session, as Techs and the Nasdaq 100 (NDX) lagged.
It was a slow day, as Summer Friday volume was in play. By the end of the session all three major averages finished with small to moderate gains. The major indices also finished the volatile week with small gains. The best performer for the week was the NDX. The NDX was up 1.3% for the week, the DJIA added only 11 points, and the S&P 500 (SPX) gained 0.7% for the week. The 10YR finished the session on Friday at 2.95%.
At the close on Friday, the DJIA added 0.54%, the SPX was up 0.46%, and the NDX gained 0.32%. Breadth was positive, 1.5 to 1, on weak volume. ROC(10)’s advanced in the session, with all three major indices remaining in positive territory. RSI’s advanced in the session, with the SPX leading at 63. The DJIA is at 62.7 and the NDX is at 57.6. The SPX and NDX MACD remain below signal. The DJIA MACD remains above signal. The ARMS index ended the day at 0.69, a fairly bullish reading at the close.
The NDX had the best week as it was still recovering from the major hits on FB and TWTR. The NDX closed at 7395 on Friday, its high of the day. It is trading back above its 20D-SMA of 7342. It continues comfortably above its 50D-SMA of 7208. The only weakness we see at the moment is the MACD, which is below signal. This is a reflection of the average being at the same levels as two weeks ago. The DJIA closed at 25462, near its high of the day. It was the best performer on Friday. It remains well above its 20D-SMA of 25168. It continues nearly 1500 points below its all-time high.
The SPX finished Friday at 2840. The SPX has the strongest RSI, but remains with its MACD below signal. This again, is the reflection of some recent sideways action. It is comfortably above its 20D-SMA of 2810. It is now just 32 points from its all-time high of 2872. The VIX finished at 11.64, down 4.5%. It continues with very low volatility.
Near term support for the NDX is at 7342 and 7200. Near term resistance is at 7443 and 7508. Near term support for the SPX is at 2825 and 2810. Near term critical resistance is at 2850 and 2862.
Europe is slightly higher in early trade Monday, while U.S. Futures are slightly higher in the premarket. There are no major economic reports scheduled for today.
The SPDR Dow Jones Industrial Average ETF (DIA) rose $0.06 (+0.02%) in premarket trading Monday. Year-to-date, DIA has gained 3.69%, versus a 6.70% 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 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.