The Dow Jones Industrial Average Is Stuck In An Early Spring Rut

Technical analyst Dave Chojnacki of Street One Financial kicks off the new trading week with a wrap up of last week’s trading action, and updates the important technical levels to watch out for as the markets stat locked in a very tight range.

Traders were anticipating the Friday Employment Report to provide future guidance, however, surprise geopolitical events overshadowed the report. An attack on Syria had Futures down Thursday night, but they gradually came back before Friday’s open.

The Employment Report was disappointing and had equities moving lower early in the day. The major indices did reverse and move higher, only to fall in the last two hours. This left the averages only slightly lower on the day.

At the close, the DJIA was down 6.8 points, the SPX inched down 1.9 pts., and the NDX slipped 2.5 points. Breadth was slightly negative on Friday, 1.1 to 1, on below average volume. RSI’s were slightly lower on Friday, with the NDX continuing to be the strongest at 59.3.

For the week, the DJIA and SPX were down just 7 points, and the NDX slipped 0.3%. The averages have been in a tight range for the last 8 sessions. The VIX gained 4% on for the week.

Long term, the upside bias continues, with the NDX making new record highs for the second week in a row. The DJIA and SPX made new highs on March 1st, and have been trading in a narrow range since.

All three major averages remain comfortably above their 20WK moving averages of: DJIA-20195, NDX-5148, SPX-2303.

Short term, the bias remains to the upside as well, with the SPX and NDX above their 50% retracement levels of 2240 and 5025, respectively. Near term, the major indices have been trading in a very narrow range for the last two weeks. They have traded very near to their 20 and 50D moving averages. Critical near term support: DJIA-20412, SPX-2322, NDX-5316.

Europe is lower in early trade, while U.S. Futures are pointing slightly higher in the premarket. Without any major economic reports on tap today, traders will look to individual company and geopolitical news, along with technical levels, to move the indexes up or down.

We will get the start of some major earnings reports in this holiday shortened week as well, with the markets closed this Friday.

The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) was unchanged in premarket trading Monday. Year-to-date, DIA has gained 4.49%, versus a 5.22% 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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