Technical analyst Dave Chojnacki recaps Tuesday’s market action and updates the technical levels that investors and traders should be looking at for hints about where the markets could be headed through the end of the year.
Yesterday’s Existing Home Sales number was better than expected, although it appeared to have little impact on equities. The major indices fell slowly until noon yesterday, when prices reversed and began moving to the upside.
The buying continued through the PM hours pushing several major indices to new all-time highs for the second straight session. As expected, volume continued below average, but again the gains were widespread. The major indices ended with small to moderate gains and near their highs of the session.
At the close, the Dow Jones Industrial Average (DJIA) gained 0.35%, the S&P 500 (SPX) added just 4.7 points, and the Nasdaq 100 (NDX) moved up 0.31%. Breadth was decidedly positive, 2.3 to 1, on below average volume, which is to be expected on a holiday week.
10-Day Rates of Change (ROC(10)’s) declined in the session, but all three major indices remained in positive territory. This was the second straight session of declining ROC’s, despite the indices ending with gains. This exemplifies the slowing momentum in the last several sessions.
Relative Strength Indicators (RSI’s) moved slightly higher with the DJIA back in overbought levels at 73.2. The SPX and NDX RSI’s remain bullish. All three major indices continue with their MACD above signal.
The ARMS index ended the day at 1.47, a fairly bearish reading. The DJIA, SPX, COMPX, and Russell 2000 all made new highs yesterday. The NDX still lags, however, sitting 36 points below its recent high of 4909.
The NDX held comfortably above its 50D-SMA(4819). The SPX closed at a new closing high of 2202 and traded as high as 2204 during the session. The old high of 2190 should serve as near term support. Fibonacci projections take the S&P rally to 2262.
The DJIA closed at a new high and above the 19000 level for the first time. The VIX continues its move to the downside ending at 12.41, down .01 of a point.
Near term support for the NDX is at 4855, 4850, and 4819. Near term resistance is at 4875 and 4900. Near term support for the SPX is at 2190, 2188 and 2175. Near term resistance is at 2212 and 2225.
Europe is mixed in early trade this morning, while U.S. Futures are slightly higher in the pre-market.
The markets will of course be closed for the Thanksgiving holiday tomorrow, and only trade for a half day on Friday, which is traditionally the lowest volume day of the entire year.
The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) rose $0.15 (+0.08%) to $190.17 per share in premarket trading Wednesday. Year-to-date, the only ETF tied to the DJIA has gained 9.21%.
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.