Market technician Dave Chojnacki of StreetOne Technical Analysis previews Wednesday’s market action with an update of the major technical levels to watch for the U.S. averages.
Not much in economic news on Tuesday to move equities, however, they opened to the upside. Investors are beginning to focus on 2nd Qtr earnings and they appear to agree with the business friendly choice for SCOTUS.
The Dow Jones Industrial Average (DJIA) continued to lead on Tuesday, as it is making up ground for a couple bad weeks. While Trade is still on everyone’s mind, it didn’t appear to impact the market yesterday. Oil continues to move higher. The DJIA was the best gainer yesterday, with only a slight gain in the Nasdaq 100 (NDX), but enough for a new closing high. The S&P 500 (SPX) ended with a moderate gain. Tuesday was the fourth straight session to the upside for the major indices.
At the close on Tuesday, the DJIA added 0.58%, the SPX was up 0.35%, and the NDX up just 6.6 points. Breadth was slightly positive, on light volume. ROC(10)’s advanced in the session, with all three major indices now in positive territory. RSI’s moved higher, with the SPX now taking the lead at 63.4. The NDX finished at 61.9 and the DJIA at 58.7. All three MACD’s have now crossed above signal, indicating the near term strength. The ARMS index ended the day at 0.71, a slightly bullish reading.
The DJIA has been fairly strong in the last four sessions. It is now comfortably above its 20D-SMA of 24615 and 50D-SMA of 24646. As noted above, its MACD has crossed above signal, indicating its recent strength. Part of the DJIA strength has come in the Financial sector. The NDX closed at a new closing high of 7282. It did form a “Doji” candlestick in the session. The NDX is more than 100 points above its 20D-SMA at 7162. The SPX ended the day at 2793 above its 20D-SMA of 2751. It also closed above its 50D-SMA of 2728. The SPX closed above some near term critical resistance of 2791. The VIX fell 0.39% as it remains relatively low at 12.64.
Near term support for the NDX is at 7200 and 7162. Near term resistance is at 7300 and 7309. Near term support for the SPX is at 2788 and 2751. Near term critical resistance is at 2800 and 2812.
Europe is significantly lower in early trade Wednesday, and US Futures are significantly lower in the premarket. Major economic reports on tap today include PPI at 8:30am and Wholesale Inventories at 10:00am.
The SPDR Dow Jones Industrial Average ETF (DIA) fell $1.72 (-0.69%) in premarket trading Wednesday. Year-to-date, DIA has gained 1.59%, versus a 4.93% rise in the benchmark S&P 500 index during the same period.
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.
Dave Chojnacki is the Chief Market Technician at StreetOne Technical Analysis. In addition, he is Portfolio Manager for Sabretooth Advisors.
Dave develops 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.
Prior to joining StreetOne Technical Analysis, Dave designed and developed I/T Systems for the Insurance and Financial Industries.
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