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Stocks Remain Firmly Overbought From A Technical Standpoint

Thursday, February 23, 2017 6:11
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(Before It's News)

Market technician Dave Chojnacki of Street One Financial updates
the key technical levels that investors should focus on in the
major U.S. averages, as stocks continue to sit in overbought
territory.

The market opened lower yesterday morning, but moved higher
after good Housing Numbers. The rise didn’t last long, however, and
equities languished, waiting for the FOMC Minutes at 2PM.

The major averages slipped a bit after the Minutes, even though
there no surprises in the notes. The Minutes suggested that the Fed
is still looking for 3 rate hikes in 2017. Equities then slid
sideways into the close, ending mixed in the session.

Small gains for the DJIA and NDX pushed them to new record highs
once again. At the close, the DJIA was up 32.6 points, the SPX
slipped 2.5 points, and the NDX inched up 1.4 points. Breadth was
slightly negative, 1.3 to 1, on slightly below average volume.

ROC(10)’s declined in the session and remain in positive
territory. RSI’s were mixed and remain at overbought
levels.
The NDX continues to be the strongest at 84.7.

All three major indices continue with their MACD above signal.
The ARMS index ended the day at 1.41, a bearish
level.
It was a ho-hum day for equities, but as noted the
DJIA and NDX moved to new highs. A slower day may be just what the
market needs to digest some of the recent gains and prepare for new
highs.

Once again, the averages are looking
overextended
, as they are near the top of their Bollinger
Bands. BB Tops are: DJIA-20831, NDX-5365, and SPX-2370. We continue
to see near term targets for the NDX and SPX to be 5362 and 2382,
respectively.

Critical near term support is 2312 for the SPX and 5216 for the
NDX. target="_blank">IWM (small-caps) fell 0.44% to
end the day at 139.58. The VIX added 1.4% to end at 11.74. This was
the second straight up day for the VIX, but volatility remains
extremely low.

Near term support for the NDX is at 5350, 5325 and 5300. Near
term resistance is at 5362 and 5375. Near term support for the SPX
is at 2362, 2350 and 2337. Near term resistance is at 2375 and
2382.

Europe is mixed in early trade, while U.S. Futures are also
mixed before the opening bell. We’ll see a bunch of major economic
reports released today, including Initial/Continuing Jobless Claims
at 8:30am, FHFA Housing Price Index at 9:00am, Natural Gas
Inventories at 10:30am, and Crude Oil Inventories at 11:00am.

The SPDR S&P 500 ETF Trust ( "http://etfdailynews.com/etf/SPY/" target=
"_blank">NYSE:SPY
)
rose $0.29 (+0.12%) in premarket
trading Thursday. Year-to-date, SPY has gained 5.70%, versus a %
rise in the benchmark S&P 500 index during the same period.

SPY currently has an "http://etfdailynews.com/smart-grade/" target="_blank">ETF Daily
News SMART Grade
of A (Strong Buy), and is
ranked #1 of 109 ETFs in the "http://etfdailynews.com/etfs/large-cap-blend-etfs/" target=
"_blank">Large Cap Blend ETFs
category.


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

"http://streetonefinancial.com/about.html" target="_blank">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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Source: http://etfdailynews.com/2017/02/23/stocks-remain-firmly-overbought-from-a-technical-standpoint/

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