Market technician Dave Chojnacki of Street One Financial wraps up the trading week with a recap of Thursday’s big market rally, which comes amid a particularly choppy past several days, and updates the key technical levels for the major U.S. averages.
Economic numbers were mixed on Thursday morning, but equities still managed to start off to the upside. Leaks coming out of Washington that there may be resolution to Healthcare Bill, and in turn, good news for Tax cuts, set the major averages on a rally.
Prices moved higher across the board, as Trump Trade sectors and Techs moved in concert. The move lasted into the final bell, and the Nasdaq 100 (NDX) closed the session at a new high. In fact, all three major indices closed with moderate to good gains.
At the close, the Dow Jones Industrial Average (DJIA) gained 0.85%, the S&P 500 (SPX) added 0.76%, and the NDX was up 0.81%. Breadth was decidedly positive, 2.6 to 1, on above average volume. ROC(10)’s advanced, with the NDX and SPX crossing into positive territory. The DJIA remains in negative territory, however.
RSI’s spiked higher, with the NDX leading at 61.1. The DJIA and SPX ended near 50. All three major averages remain with their MACD below signal. The ARMS index ended the day at 0.95, a nearly neutral reading.
It was a strong day for equities, in what is turning out to be a very choppy week. After going through a prolonged period where prices changed very little, we have had two strong up days and two strong down days this week.
The NDX, as noted earlier, ended with a new closing high of 5443. It moved above its 20D-SMA of 5406, but fell short of its existing intra-day high of 5479. The DJIA was the only major index unable to close above its 20D-SMA of 20618. The SPX closed at 2355, four points above its 20D-SMA of 2351. It closed one point below its 50D-SMA of 2356.
All three major indices are now back above critical near term support: DJIA-20412, SPX-2322, NDX-5316. The IWM (iShares Russell 2000) spiked 1.2% to 137.52, while the VIX fell 5.2% to finish at 14.15.
Near term support for the NDX is at 5425 and 5406. Near term resistance is at 5450 and 5462. Near term support for the SPX is at 2351, 2325 and 2322. Near term resistance is at 2356 and 2375.
Europe is mixed in early trade, and U.S. Futures are pointing higher as we close out the trading week. Despite it being a Friday, we’ll see several important economic reports today, including Initial/Continuing Jobs Claims at 8:30am, the Philadelphia Fed at 8:30am, Leading Indicators at 10:00am, and Natural Gas Inventories at 10:30am.
The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) was unchanged in premarket trading Friday. Year-to-date, DIA has gained 4.15%, versus a 5.28% 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.
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