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Market Technicals Pointing To More Gains Ahead

Tuesday, November 22, 2016 7:17
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With no major economic news, the markets opened the week and day yesterday a bit choppy. After the first hour, equities began a slow steady march to the upside.

The move lasted through the entire session as the major indices ended near their highs of the day.  Though volume dropped off, many of the major indices made new highs, such as the DJIA, SPX, COMPX, and Russell 2000.  The NDX had a good day but continues slightly below its October highs.  

The major indices all finished with moderate to significant gains.  At the close, the DJIA was up 0.47%, the SPX moved up 0.75%, and the NDX gained 1%.  Breadth was decidedly positive, 3 to 1, on below average volume, although this holiday shortened week is typically met with lower volume.

ROC(10)’s declined in the session, however, all three major indices remained in positive territory.  RSI’s moved slightly higher with the DJIA back over 70 at 71.5. The SPX RSI ended at 66.9, with the NDX at 56.8.  All three major indices continue with their MACD above signal. The ARMS index ended the day at 0.82, a bullish reading.

The NDX has been up 4 of the last 5 sessions, and near term technical strength is becoming in parity with the other major indices. The NDX moved back above its 50D-SMA of 4816, and remains comfortably above critical near term support of 4647.  It remains 50 points below the October closing high of 4909.

The SPX closed at 2198. This was its high of the day and 8 points above its previous closing high. With the rally across the board and new highs in the major indices, we see more near term strength.  The DJT moved to a new 52 week high, but remains several hundred points below its Nov. 2015 high of 9310. The VIX finished down 3.3% to 12.42 as implied volatility continues to plunge post-election.

Near term support for the NDX is at 4855, 4850, and 4816.  Near term resistance is at 4875 and 4900.  Near term support for the SPX is at 2188 and 2175. Near term resistance is at 2200 and 2212. Europe is significantly higher in early trade.

US Futures are slightly higher in the pre-market. The only major economic report we’ll see today are new home sales numbers at 8:30am eastern time.

The SPDR S&P 500 ETF Trust (NYSE:SPY) rose $0.14 (+0.06%) to $220.29 per shre in premarket trading Tuesday. Year-to-date, SPY has gained 7.99%.


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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