Nasdaq Begins To Gain Parity With The Dow, S&P 500

Technical analyst Dave Chojnacki of Street One Financial recaps Tuesday’s market action, which saw more all-time highs for the major indexes and the Nasdaq beginning to keep pace with the Dow and S&P 500.

Buyers Re-Emerge

Equities got off to a strong start on Tuesday, then moved nearly sideways or slightly lower through the remainder of the session. We saw investors moving into the Trump-friendly sectors, including Financials, Industrials and Materials once again, pushing the DJIA to new highs.

The NDX closed at a new high, but was unable to hit a new intraday high. The averages ended the day moderately higher, but volume has dropped off as we move closer to the holidays. At the close, the DJIA gained 0.46%, the SPX was up 0.36%, and the NDX added 0.38%. Breadth was positive, 1.9 to 1, on low volume.

Technicals Show That Dow Still Leads

ROC(10)’s advanced, and all three major indices remained in positive territory. RSI’s moved slightly higher with the DJIA continuing to be the strongest at 81.5. The SPX ended at 70.6, moving into overbought territory.

All three major indices remain with their MACD above signal. The ARMS index ended the day at 0.78, a slightly bullish reading. After consolidating for 4 days, the major averages attempted to break out to new highs. The DJIA and NDX closed at new highs, 19974 and 4953, respectively.

The DJIA continues to be the strongest index, sitting comfortably above critical near term support of 19500. With the last 2 weeks of the year typically positive for equities, we would expect to see more new highs.

The NDX is beginning to gain parity with the other major indices, ending with an RSI of 62.5. It is comfortably above its 20D-SMA of 4862 and critical near term support of 4723. The SPX closed at 2270, just 1 point below its previous closing high. 2277 continues to be its intraday high and near term resistance level.

Near term support for the NDX is at 4925 and 4909. Near term resistance is at 4963 and 4975. Near term support for the SPX is at 2262 and 2250. Near term resistance is at 2277 and 2292.

The VIX fell 2.2% to 11.45, as volatility continues to be completely non-existent in the markets.

Wednesday Preview

Europe is up slightly in early trade this morning, while U.S. Futures are pointing slightly higher in the pre-market. In terms of economic data on tap today, we’ll see Existing Home Sales at 10:00am and Crude Inventories at 10:30am, both of which have the potential to move the markets, given the low trading volume expected as we inch toward the holidays.


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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