Technical analyst Dave Chojnacki recaps Thursday’s market action, in which the post-Trump rally continued for equities as major indexes rose close to new all-time highs.
Good Housing Starts and low Initial Unemployment Claims set the table for equities to open higher on Thursday. We continue to see the election rally take hold, with equities rising and bonds falling.
Fed Chair Janet Yellen spoke to Congress, giving little indication that rate hikes were imminent, though odds still roundly favor a December hike. The major indices moved steadily to the upside during the session and once again, the NDX outperformed as Techs and small cap issues rose. By the close, the three major indices ended positive, with the NDX the strongest.
At the close, the DJIA added 0.19%, the SPX moved up 0.47%, and the NDX gained 0.72%. Breadth was slightly positive, on average volume. ROC(10)’s advanced, with all three major indices in positive territory. RSI’s moved slightly higher with the DJIA at 71.4, continuing in near term overbought territory. The SPX RSI ended at 65, with the NDX at 54.
All three major indices continue with their MACD above signal. The ARMS index ended the day at 0.84, a bullish reading. The NDX was the strongest index again, for the third straight session. It had trailed the other indices, so this has been a catch-up. It moved above its 50D-SMA(4812) in the session and is comfortably bullish in the near term. Like the other two major indices, it closed at its high of the session.
The SPX came within two points of its closing all-time high reading of 2190. It traded as high as 2193 intra-day in August. We expect to see it test these levels and confirm the recent highs of the DJIA. Critical near term support level remains at 2147.
IWM (iShares Russell 2000 ETF) also moved to new highs ending at 130.30. This indicates widespread strength in the equities space. Meanwhile, the VIX was off 2.7% to finish at 13.35, continuing its post-election downturn.
Near term support for the NDX is at 4812 and 4800. Near term resistance is at 4850 and 4875. Near term support for the SPX is at 2175 and 2162. Near term resistance is at 2190, 2193 and 2200.
Europe is slightly lower in early trade, while US Futures are mixed in the pre-market. Without any major economic reports today, investors will likely focus on a handful of earnings reports from Foot Locker and Abercrombie.
The SPDR S&P 500 ETF Trust (NYSE:SPY) was unchanged at $218.99 per share in premarket trading Friday. Year-to-date, the largest fund tied to the benchmark S&P 500 index has gained 7.42%.
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>