Strength Returns To Dow Jones Industrial Average, Despite Weak Volume

Market technician Dave Chojnacki of Street One Financial wraps up the trading week with a look at the Thursday performance of the major U.S. averages, and updates the important technical levels to focus on as we conclude the first quarter.

Prior to the opening bell on Thursday, we got a slightly better than expected GDP number of 2.1% and a poorer than expected Initial Claims number. This had equities open flat, but then quickly begin to move slowly to the upside.

The major averages hit their high of the day near the Europe close and then settled into a choppy sideways trade through the remainder of the session. The DJIA was the best performer on the day, but a small gain in the NDX had it establishing a new record close and a new intra-day high.

At the close, the DJIA gained 0.33%, the SPX added 6.9 points, and the NDX tacked on 9.4 points. Breadth was positive, 1.5 to 1, on weak volume. ROC(10)’s advanced, with the NDX the only major index in positive territory.

RSI’s rose slightly with the NDX at 66.5 and the DJIA and SPX in the 50’s. All three major averages remain with their MACD below signal. We do see the NDX MACD curving to the upside on the recent near term strength.

The ARMS index ended the day at 1.28, a slightly bearish reading. Though the DJIA was the best performer in the session, we saw the NDX record new record highs of 5439 (close) and intra-day (5446). It also remains comfortably above its 20D-SMA of 5384, and closed the session just 2 points below its Bollinger Band top.

The DJIA remained below its 20D-SMA of 20807, but closed up to 20728 on the strength of Financials. The XLF (SPDR Financials) was up 1.31% to end at 23.93. The SPX moved above its 20D-SMA of 2364, closing at 2368. It is now two consecutive days that volume has been very weak, however, we continue to get decent breadth.

The IWM (small-caps) added 0.76%, to end at 137.26. The VIX was up 1% to finish at 11.54.

Near term support for the NDX is at 5425 and 5400. Near term resistance is at 5441, 5446 and 5450. Near term support for the SPX is at 2364 and 2350. Near term resistance is at 2375 and 2390. Europe is lower in early trade. US Futures are lower in the pre-market. Personal Income/Spending-8:30am PCE Price Index-8:30am Chicago PMI-9:15am Mich Sentiment-10:00am

The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) was unchanged in premarket trading Friday. Year-to-date, DIA has gained 4.78%, versus a 5.71% 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 74 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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