Fed Testimony Big Factor Today For Dow Jones Industrial Average

Technical analyst Dave Chojnacki of Street One Financial recaps Tuesday’s market action and looks ahead to the Wednesday session with a close look at the important technical levels for the major U.S. indexes, as important Fed testimony looms.

Economic reports were not stellar on Tuesday, and the major averages opened to the downside. We then witnessed the Nasdaq 100 (NDX) outperforming to the upside as Techs were again catching a bit of a bid.

The Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) began to recover much more slowly. By late morning, the indices were hit with selling off, as news of Trump Jr. involved in meetings with Russians hit the wires. It didn’t take long for the markets to recover, however, as analysts began to see little impact on economic policies.

The major indices ended little changed and mixed. At the close, the DJIA was up 0.55 of a point, the SPX slipped 1.9 points, and the NDX added 0.27%. Breadth was just slightly positive, 1.1 to 1, on below average volume. ROC(10)’s were mixed with the DJIA moving lower and back into negative territory. The SPX declined and remained in negative territory, while the NDX advanced and continued in negative territory.

RSI’s were also mixed in the session. The DJIA continues to lead at 55.4, the SPX at 50.3 and the NDX at 50.7. All three major indices remain with their MACD below signal. The ARMS index ended the day at 0.88, which is a slightly bullish reading.

Had it not been for the Trump Jr. dip, it would have been a dull day. Recently we have concentrated on moving averages and Bollinger Bands®, because that is what the major averages are trading around.

The DJIA traded as low as its lower Bollinger Band on Tuesday, which is 21276, before it found support. It closed at 21409, just slight above its 20D-SMA of 21398. The NDX met resistance in the session at its 50D-SMA of 5717. It closed just above its 20D-SMA of 5706. The SPX found support at its lower BB of 2412, before closing just below its 20D-SMA of 2431.

The VIX fell 1.9% to end at 10.89, as volatility remains suppressed.

Near term support for the NDX is at 5700 and 5675. Near term resistance is at 5717 and 5725. Near term support for the SPX is at 2425 and 2415. Near term resistance is at 2431 and 2450.

Europe is moderately higher in early trade, and U.S. Futures are pointing higher in the premarket. Fed Chair Janet Yellen’s testimony will take center stage today at 10:00am, and we’ll also see the EIA Report at 10:30am and Fed Beige Book at 2:00pm.

The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) was unchanged in premarket trading Wednesday. Year-to-date, DIA has gained 8.34%, versus a 8.35% 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 #5 of 76 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.

Published at https://etfdailynews.com/2017/07/12/fed-testimony-big-factor-today-for-dow-jones-industrial-average/