Taking a look at the technicals on 11/12/2018

Market technician Dave Chojnacki of StreetOne Technical Analysis

A higher than expected PPI number (0.6% vs 0.2%) had equities moving lower on Friday’s open.   The number brought interest rate fears to investors and sent stocks falling. Tech stocks, especially the FANG’s were the weakest in the session.  Oil prices continued to move lower on Friday, but this didn’t help the industrials, as the DJIA also gave up ground. The SPX traded right down to its 200D-SMA during the session and bounced off.  The major averages rallied in the last hour to move off their lows, but still finished with moderate to significant losses. The 10YR ended the day at 3.19.                                               

At the close on Friday, the DJIA fell 0.77%, the SPX was down 0.9%, and the NDX lost 1.6%.  For the week, the DJIA added 2.8%, the SPX was up 2.1%, and the NDX up 1%. Breadth on Friday was negative, 2 to 1, on average volume.  ROC(10)’s advanced in the session, with all three major averages continuing in positive territory. RSI’s moved lower, with the DJIA continuing to lead at 56.4.  The SPX finished at 51.2 and the NDX at 47.3. All three major indices remain with their MACD above signal. The ARMS index ended the day at 1.06, a neutral reading at the close.    

Near term technicals continued to improve last week.  MACD’s are above signal and RSI’s continue to rise. The DJIA closed at 25989, well above its 50WK-SMA of 25106.  It is above its 20D-SMA of 25344 and has now moved above its 50D-SMA of 25870. The NDX closed at 7039, just below its 200D-SMA of 7071.  It is also just below its 50% retrace level of 7059. The NDX did move above its 20D-SMA of 7030 during the week. It remains below its 50D-SMA of 7299.  The SPX closed at 2781, holding above its 200D-SMA of 2763. It tested its 200D in the session, but managed to finish above. It continues to hold its 50WK-SMA of 2754.   It also closed above its 20D-SMA of 2740, but is below its 50D-SMA of 2829. The VIX finished at 17.36, up 3.8%. For the week it was down 11%. Near term support for the NDX is at 7030 and 7000.  Near term resistance is at 7071 and 7299. Near term support for the SPX is at 2763 and 2750. Near term resistance is at 2800 and 2829. Europe is lower in early trade. US Futures are mixed premarket.          

The SPDR Dow Jones Industrial Average ETF (DIA) was trading at $255.92 per share on Monday afternoon, down $4.17 (-1.60%). Year-to-date, DIA has gained 4.31%, versus a 3.15% 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.