Technical analyst Dave Chojnacki of Street One Financial recaps last week’s market action, which saw the major indices hit new highs, although the Dow fell just short of the landmark 20K level.
Tech Stocks Continue To Lead
The market opened slightly lower on Friday after the Employment Numbers, which were below expectations. Equities quickly reversed and started a move to the upside, which lasted through most of the session. The upside momentum pushed the major indices to new highs on the day, while gains were moderate to significant.
The NDX was the strongest index in the session. At the close, the DJIA added 0.32%, the SPX gained 0.35%, and the NDX moved up 0.85%. Breadth was slightly negative, on below average volume. The ARMS Index ended at 1.11, nearly neutral. All 3 major indices hit new intra-day highs on Friday and the SPX and NDX closed with new highs. For the week, the DJIA moved up 1%, the SPX added 1.6%, and the NDX gained 2.9%.
The VIX was down every day last week. It ended Friday down 3% to 11.32. For the week, the VIX was down 19%. We get some key economic reports later this week, such as Wholesale Inventories, PPI, and Retail Sales, which could add some volatility back into equities.
Long term, the upside bias continues, as the major indices hit new highs last week. The DJIA traded as high as 19999.63, just under the 20000 level. The NDX closed at 5007 and the SPX at 2276, both new closing highs.
The NDX and SPX are comfortably above long term 20WK moving averages of 4829 and 2181, respectively. Short term bias is to the upside as the averages are breaking out of a ‘bull handle’.
Short term targets for the NDX and SPX are 5086 and 2342, respectively. Near term, the NDX closed slightly above the top of its Bollinger Band, and the SPX is just 3 points below. Critical near term support for the SPX is in the 2177 to 2187 area. For the NDX, critical near term support is at 4721.
Few Monday Catalysts
European markets are lower this morning in early trading, while U.S. futures are down slightly. The only major economic data we’ll see today is the Consumer Credit report at 3:00pm.
The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) was unchanged in premarket trading Monday. Year-to-date, the only ETF tracking the DJIA has gained 1.01%, versus a 1.65% rise in the benchmark S&P 500 index during the same period.
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 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.