Market technician Dave Chojnacki of Street One Financial recaps Wednesday’s weak market action, and updates the important technical levels that investors should pay attention to as we wrap up the holiday-shortened trading week.
Equities moved sideways at the open yesterday, as geopolitical concerns continue to be at the forefront. Prices began falling after the first hour and continued declining through most of the morning.
The averages fell through some key technical levels and choppy trade in the PM did not bring them back above. Investors were moving out of Trump Trade sectors and moving into Defensive Sectors such as Utilities and Consumer Staples.
The major indices ended the session with small to moderate losses. At the close, the Dow Jones Industrial Average (DJIA) was down 0.29%, the S&P 500 (SPX) fell 0.38%, and the Nasdaq 100 (NDX) lost 0.4%. Breadth was negative, 2 to 1, on below average volume. ROC(10)’s declined with all three major indices continuing in negative territory.
RSI’s fell, with all three major indices now in the 40’s. All three major averages remain with their MACD below signal. The ARMS index ended the day at 1.16, a slightly bearish reading.
The DJIA and SPX continue their slow walk down since early March. On Wednesday they fell and closed below their 50D-SMA’s, threatening further downside. The 50D-SMA’s are now at: DJIA-20643, SPX-2350.
One bright note in yesterday’s session is that the averages did not break their prior session’s lows. Those levels were: DJIA- 20512, SPX-2337, NDX- 5359. Critical near term support levels are: DJIA-20412, SPX-2322, NDX-5316.
The NDX continued below its 20D-SMA of 5403, but remains above its 50D-SMA of 5343. One of the bigger losers in the session was IWM (iShares small-caps), indicating that the losses were widespread. It was down 1.3% to 135.04. GLD (SPDR Gold) continued its move higher after crossing its 200D-SMA in the prior session.
The VIX finished higher for the 4th straight session. It was up 3.2% to 15.56.
Near term support for the NDX is at 5375 and 5350. Near term resistance is at 5405 and 5425. Near term support for the SPX is at 2337 and 2322. Near term resistance is at 2350 and 2357.
Europe is lower in early trade, and US Futures are pointing lower. Major economic reports on tap this morning include PPI and Initial/Continuing Claims at 8:30am, Michigan Sentiment at 10:00am, and Natural Gas Inventories at 10:30am.
The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) fell $0.34 (-0.17%) in premarket trading Thursday. Year-to-date, DIA has gained 4.13%, versus a 4.70% 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 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.