More Record Highs Now A Regular Thing For Dow Jones Industrial Average

Market technician Dave Chojnacki of Street One Financial recaps Monday’s market action and looks ahead to Tuesday, as the Dow continues to be the strongest major new index, recently closing right at its highs of the day.

Equities gapped up at the open to start the day and the week. With no major economic news to move the markets, investors may have been placated by the Nasdaq 100 (NDX), which entails many of the big cap Tech names, finding support last week near its 50D-SMA.All three major averages got off to a good start on Monday and the Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) moved to new all-time highs. Notably, most of the gains came in the first and last hours of trading. It was a typical light volume day for the start of a new week.

At the close, the DJIA gained 0.67%, the SPX moved up 0.83%, and the NDX, the big winner, was up 1.6%. Breadth was positive, 1.5 to 1, on light volume. ROC(10)’s advanced, with the SPX moving back into positive territory. The DJIA continues in positive territory, while the NDX continues negative.

RSI’s moved higher, with the DJIA and SPX coming close to overbought levels. The DJIA finished at 73.8 and the SPX at 69. The NDX remains the weakest at 54.5. The SPX saw its MACD cross back into positive territory, joining the DJIA. The NDX remains in negative territory. The ARMS index ended the day at 0.89, a slightly bullish reading.

The NDX bounced off its 50D-SMA last week and investors piled in feeling that a near term bottom may have been put in. They were back buying the FAANG stocks. The NDX did find resistance in the session at its 20D-SMA of 5778.

The DJIA and SPX made new highs in the session. The DJIA closed at 21528, which was its high of the day. The DJIA is comfortably above its 20D-SMA of 21177. It moved above its top Bollinger Band® of 21497.

The SPX closed at 2453, which was its high of the session. It closed just 2 points below its top Bollinger Band of 2455.

The VIX fell 0.01 of a point to finish at 10.37.

Near term support for the NDX is at 5750 and 5725. Near term resistance is at 5775, 5778 and 5800. Near term support for the SPX is at 2450 and 2425. Near term resistance is at 2462 and 2475.

Europe is mixed in early trade, while U.S. Futures are also mixed and little changed in the premarket. With no major economic reports on tap today, we could be in for another low-volume session.

The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) fell $0.05 (-0.02%) in premarket trading Tuesday. Year-to-date, DIA has gained 8.81%, versus a 9.45% 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 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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