With the U.S. markets looking set to open significantly higher on the back of a key French election outcome, market technician Dave Chojnacki of Street One Financial recaps last week’s action and updates the key technical levels to watch for in the coming week.
Decent earnings reports couldn’t keep prices up at the open on Friday, as geopolitical risks continued to weigh on the markets. North Korea and the French election were clearly on the minds of investors, and Friday was also Options Expiration, which helped increase volume.
The major indices fell through most of the session, but held up fairly well and were only slightly lower at the close. On the final trading day of the week, the Dow Jones Industrial Average (DJIA) closed down 30.9 points, the S&P 500 (SPX) was off 7.1 points, and the Nasdaq 100 (NDX) slipped 1.4 points.
Breadth was slightly negative on a pick-up in volume. We did see the SPX ROC(10) cross back into negative territory, while RSI’s were little changed, and the NDX remains the strongest at 60.7. The NDX did make a new closing high last week of 5443.
For the week, the DJIA was up 0.4%, the SPX added 0.8%, and NDX gained 1.6%. The VIX was up on Friday to 14.63, but fell 8.3% for the week as volatility subsided a bit.
Long term, the upside bias continues, with the NDX making a new closing high last week. The DJIA and SPX are lagging somewhat, as we are getting some sector rotation since early March. 200 Day moving averages are holding up well across the board: DJIA-19320, SPX-2234, NDX-4977.
Short term, the DJIA and SPX remain below their 50D-SMA’s of 20705 and 2357, respectively. While we see some weakening in them, the NDX continues to remain stronger. All three averages remain comfortably above their 50% retracement levels.
Near term, the bias for the DJIA and SPX remains to the downside. MACD’s remain below signal, but they continue to hold critical near term support: DJIA-20404, SPX-2322, NDX-5416.
Europe is significantly higher in early trade, and U.S. futures are skyrocketing as well. Earnings reports continue in earnest, and later this week we’ll see more housing data along with durable orders numbers, although there aren’t any major economic reports on tap for today.
The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) rose $2.23 (+1.09%) in premarket trading Monday. Year-to-date, DIA has gained 3.92%, versus a 4.95% 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.