Can The Dow Jones Industrial Average Build On Record Highs?

Technical analyst Dave Chojnacki of Street One Financial updates the important technical data to watch as all the major U.S. averages sit at fresh all-time highs.

The major indices opened higher on Tuesday, continuing the prior day’s rally. We got a good JOLT’s number beating estimates, but equities paid little attention to it.The averages rose steadily through the day, but stayed in a very narrow range. The rally was widespread, but Tech stocks lagged in the session. By the final bell, the major indices were only slightly higher, but all three closed with new record highs.

At the close, the Dow Jones Industrial Average (DJIA) was up 0.28%, the S&P 500 (SPX) gained 0.34%, and the Nasdaq 100 (NDX) added 0.25%. Breadth was positive, 1.8 to 1, on above average volume. ROC(10)’s were mixed, with the NDX declining. All three major indices remain in positive territory.

RSI’s moved higher, with the SPX continuing to be the strongest at 64.4. The NDX finished at 60.2 and the DJIA at 62.7. The DJIA MACD crossed above signal, joining the NDX and SPX. The ARMS index ended the day at 0.66, a moderately bullish reading.

As mentioned earlier all three major indices closed with new record highs. The SPX also made a new intraday high of 2496. The SPX traded in narrow range, between 2490 to 2496, but volume continued fairly nicely. It continues well above its 20D-SMA(2456) and its 50D-SMA(2457). It continues above its 9 month trend-line of 2472.

The DJIA closed at a new record close of 22118.86, just 0.42 of a point above its previous high. It also closed just above its Bollinger Band® top 22103. It is now comfortably above its 20D-SMA of 21864. The NDX closed at 5995 and traded as high as 6002. Its all-time intra-day high is 6009.

IWM (iShares Russell 2000) closed up 0.6% to 141.54. It remains a few points below its all-time closing high of 144.05. The VIX was down 1.4% to finish at 10.58.

Near term support for the NDX is at 5988 and 5975. Near term resistance is at 6000, 6009 and 6025. Near term support for the SPX is at 2488 and 2475. Near term resistance is at 2500 and 2512.

Europe is mixed in early trade Wednesday, and U.S. futures are slightly lower in the premarket. Major economic reports on tap today include PPI at 8:30am and the Petroleum Report at 10:30am.

The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) was unchanged in premarket trading Wednesday. Year-to-date, DIA has gained 13.78%, versus a 12.90% 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 75 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 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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