Market technician Dave Chojnacki of Street One Financial examines Thursday’s rally to new all-time highs for the S&P 500 and Dow Jones Industrial Average, which came amid lackluster trading volume.
Initial Claims were better than expected on Thursday morning, and strength in European bourses helped push U.S. markets higher at the open. News from the White House regarding coming Tax Reform sparked equities to explode to the upside. The major averages moved higher through the morning hours, and prices didn’t level off until the European markets closed.
Equities traded sideways through the PM hours and ended the session with moderate gains. At the close, the DJIA added 0.59%, the SPX moved up 0.58%, and the NDX gained 0.3%. Breadth was positive, 2 to 1, on below average volume. ROC(10)’s advanced in the session, with the DJIA and SPX moving into positive territory.
RSI’s were moved higher, with the NDX remaining the strongest at 74.3, a slightly overbought condition. The DJIA and SPX are now in the mid 60’s. The DJIA and SPX had their MACD cross above signal, joining the NDX.
The ARMS index ended the day at 0.83, a slightly bullish reading.
The DJIA and SPX once again moved out of their recent range to new highs. They closed at record highs of 20172 and 2307, respectively. The NDX also catapulted to new highs, ending at 5212. The DJIA and SPX had two key indicators, ROC(10’s) and MACD’s turn positive. The drawback to the session was below average volume, which did little to confirm or give conviction to the record highs. Regardless, new highs are always a positive technical sign.
The major averages are comfortably above their 20D-SMA’s of: DJIA-19949, SPX- 2283, and NDX-5121. IWM(Russell 2000) was up strong 1.4%, to 136.90. It remains below its record high close of 138.31. The VIX was down 5% to 10.88. Volatility continues extremely low. Near term support for the NDX is at 5200 and 5188. Near term resistance is at 5225 and 5250. Near term support for the SPX is at 2300 and 2288. Near term resistance is at 2312 and 2325.
Europe is mixed in early trade this morning, while U.S. Futures are pointing higher premarket. In terms of economic reports on tap today, we’ll see Export/Import Prices at 8:30am and Michigan Consumer Sentiment at 10:00am.
Without any major earnings reports slated for today, we could be in for some muted action today before heading into the weekend.
The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) rose $0.26 (+0.13%) in premarket trading Friday. Year-to-date, DIA has gained 2.13%, versus a 3.16% 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.