Technical analyst Dave Chojnacki of Street One Financial brings us his daily market technicals update, which today includes a weakening in the Dow after several months of outperformance versus the other two major indexes.

Dow Lags Other Indexes Considerably

Mixed economic numbers did little to influence the direction of equities at the open, as they traded flat for nearly the first hour and a half. Then the major indices went in different directions, as we saw the DJIA and SPX losing ground, while the NDX moved into positive territory.

The DJIA and SPX hit their lows near mid-day and then slowly recovered into the close, but unable to get back into positive territory. The NDX, buoyed by Techs, managed to register a gain in the session. At the close, the DJIA fell 42.8 points, the SPX gave up just 1.7 points, and the NDX gained 0.56%. Breadth was a little negative, 1.3 to 1, on slightly above average volume.

Technicals Still Bullish, But Weakening

ROC(10)’s were mixed in the session with the DJIA and SPX declining and moving back into negative territory. The NDX advanced and remained in positive territory. RSI’s were mixed but remained bullish with the major indices between 59.3 and 66.2. MACD’s remain below signal for all three major averages.

The ARMS index ended the day at 1.02, a neutral reading. The major indices were mixed and traded in a fairly narrow range for the day. The NDX, which was the strongest index in the session, closed just one point below its recent closing high of 4965. During the session it traded slightly above that level, and came within 25 points of its recent intraday high of 4992. The SPX ended the day little changed and traded as high as its recent closing high of 2271, but was unable to hold that level and closed 2 points below.

The near term strength remains strong, as the major indices remain within striking distance of their highs. The GLD (SPDR Gold) gained 1.5% to 112.58, as gold has bounced off lows. It appears to be trying to close a gap at 115.

The VIX fell 1.5% to 11.67. Near term support for the NDX is at 4950 and 4919. Near term resistance is at 4965 and 4988. Near term support for the SPX is at 2262 and 2258. Near term resistance is at 2271 and 2277.

Friday Outlook

Europe is slightly lower in early trade this morning, while U.S. Futures are mixed in the pre-market. We’ll see a couple of important economic reports today, with the Employment Report due at 8:30am and Factory Orders out at 10:00am.

SPDR Dow Jones Industrial Average ETF (NYSE:DIA) fell $0.15 (-0.08%) in premarket trading Friday. Year-to-date, DIA has gained 0.63%, versus a 1.28% rise in the SPY (S&P 500) during the same period.

DIA currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #6 of 76 ETFs in the Large Cap Value ETFs category.

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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.

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