Market technician Dave Chojnacki of Street One Financial examines the state of the U.S. markets, and finds tech stocks firmly taking the lead as industrials begin to show some short-term weakness.
Equities started the week mixed yesterday, with the DJIA and SPX moving lower and the NDX holding in positive territory. There was little news to move the markets, though geopolitical issues abound, in Netherlands, Turkey, North Korea, etc.
The major indices stayed in a very narrow range through the session on light volume. By the final bell, the averages were mixed, with the DJIA the only major index ending in the red. The NDX, with a small gain, actually snuck in with a new closing high.
At the close, the DJIA fell 21.5 points, the SPX slipped just 0.87 of a point, and the NDX was up 8.6 points. Breadth was positive, 1.5 to 1, on weak volume. ROC(10)’s were mixed, with the DJIA and SPX declining in the session, and the NDX advancing. All three major averages remain in positive territory.
RSI’s were little changed, with the DJIA and SPX in the 60’s and the NDX the strongest at 72.4. All three major averages remain with their MACD below signal.
The ARMS index ended the day at 1.07, a fairly neutral reading. The NDX closed at 5394, a new record closing high. It came within two points of its intraday high of 5398 during the session, and is the strongest index near term, with Techs and Biotechs leading the way. The NDX’s Bollinger band top is at 5414, as it becomes slightly extended with an RSI of 72.4.
The DJIA and SPX have been weaker near term, but they are still holding their 20D-SMA’s: DJIA- 20803, SPX-2364. They continue to hold this critical level and are within striking distance of their recent highs. IWM (small caps) closed slightly higher at 136.28, and may have found some support after the recent pullback.
Monday’s breadth showed many more issues advancing than declining. The VIX, predictably, slipped 2.6% to finish at 11.35, as volatility melts away once again.
Near term support for the NDX is at 5388 and 5375. Near term resistance is at 5398, 5400 and 5419. Near term support for the SPX is at 2362 and 2358. Near term resistance is at 2375 and 2388.
Europe is mixed in early trade, while U.S. Futures are pointing slightly lower in the premarket. The only major economic news on tap today is the PPI report at 8:30am.
With the northeastern U.S. enduring a major late-winter storm, we may be in for another low-volume day in the markets, before things pick back up again later in the week amid the all-important Fed meeting tomorrow.
The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) fell $0.25 (-0.12%) in premarket trading Tuesday. Year-to-date, DIA has gained 5.79%, versus a 6.39% 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.