Yesterday, the morning was flat even though ISM and Factory orders disappointed. FB earnings were down and early weakness in its share price was hurting the Nasdaq (NDX). The indices took a further decline in the PM hours, as we saw a slow but steady move downwards.
The major indices hit their lows of the day just before the final bell. The NDX was the biggest loser, while the Dow Jones Industrial Average (DJIA) only suffered a small loss. The S&P 500 (SPX) ended with a moderate loss. At the close, the DJIA was off 28.9 points, the SPX fell 0.44%, and the NDX, the big loser, lost 1%.
Breadth was negative, 1.5 to 1, on average volume. 10-day rate of changes (ROC(10)s) were mixed, with the DJIA rising and the NDX and SPX declining.
All three major indexes remain in negative territory. Relative strength indexes (RSI’s) fell, with the NDX at 30.8 and the SPX at 29.1 moving into over-sold territory. The DJIA’s RSI ended at 36.1. All three major indices have their Moving Average Convergence Divergence (MACD) below signal. The ARMS index ended the day at 0.85, a slightly bullish indication.
The NDX and SPX closed down for the 8th straight session yesterday. The SPX moved through the short term support level of 2095 and now has the 200-day simple moving average (200D-SMA) in its sights. The 200D-SMA should provide some support at 2082, but a break through this level and we begin to see the possibility of further downside action. There is another key support level at the Fibonacci 61% retrace level of 2072.
The Nasdaq (NDX) is nearing the Fibonacci 38% retrace level of 4638, closing 41 points above. Its 50% retrace level is at 4555 and should provide some short term support. IWM (Russell small-caps) continues its move to the downside and is approaching its 200D-SMA.
The VIX was up 14.16% to finish at 22.14. It now reflects the choppy action we have seen. Near term support for the NDX is at 4675 and 4638. Near term resistance is at 4700 and 4725. Near term support for the SPX is at 2082 and 2072. Near term resistance is at 2095 and 2112, 2114-2117.
The only key economic report today are the employment numbers, which figure to factor into stocks’ early action.
Meanwhile, Europe is down significantly in early trade, while US Futures are pointing slightly lower in the pre-market.
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 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./div>