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Markets Set For Consolidation In Holiday Shortened Week?

Monday, November 21, 2016 6:25
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With not much news to move the Markets on Friday, prices drifted lower through the morning hours. There was an attempt to do some buying in the PM, but traders could not lift prices into positive territory.

With the major indices drifting up for the past two weeks, and several indices hitting new highs, equities were poised for some consolidation.  At the close on Friday, the DJIA slipped 0.19%, the SPX lost 0.24%, and the NDX fell 0.38%.

Breadth was slightly negative, 1.1 to 1, on above average volume.  The increase in volume was most likely attributed to options expiration.

RSI’s were slightly lower, but remain bullish. The DJIA’s RSI dropped below 70, to 69.1.  The ARMS index ended at 1.12, a slightly bearish reading.  The DJIA and IWM (Russell 2000) made new all-time highs last week.  For the week, the DJIA was up 20 points, the SPX added 0.7%, and the NDX gaining 1.1%.  

The VIX was down 3.7% on Friday to 12.85, continuing its post-Trump slide.  For the week, the VIX lost 9.3%.

Trading Trends

Longer term, the Market continued its upside bias with the DJIA moving to new highs for the second week in a row.  The rally spread last week as the Russell 2000 moved to new highs.  The NDX remains above longer term averages of 20WK-4764, and 50WK-4528.  The SPX now sports a 20WK-2156 and 50WK-2072.

On the long term chart, the only negative is the MACD below signal for the NDX and SPX.  Short term, the bias remains to the upside, with the SPX and NDX above the 50% retrace levels of 4555 and 2095, respectively.  Near term, the major indices remain strong as the SPX closed just 9 points below its all-time closing high of 2190.

We may see a little more consolidation in this Holiday shortened week. The markets will be closed on Thursday for Thanksgiving, and will see an abbreviated day on Friday.

As far as economic reports, we’ll get Durable Orders and FOMC Minutes this week. Europe is up moderately in early trade.  US Futures are slightly higher in 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.

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./div>

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