Rollercoaster Dow Jones Industrial Average Looks To End Week On High Note
ETF Daily News | Jun 01, 2018 08:13AM ET
Market technician Dave Chojnacki of StreetOne Technical Analysis wraps up the trading week with an in-depth look at today’s back-and-forth markets, which continue to struggle to find a firm direction.
Despite good economic reports on Thursday, the market was unable to sustain a rally. The NASDAQ 100 (NDX) traded in positive territory for a good portion of the day, while the Dow Jones Industrial Average (Dow) and S&P 500 (SPX) spent most of their time in the red.
We have seen roller coaster action this week, with a big move down on Tuesday, up big on Wednesday and down big on Thursday. The NDX was the better performer in the session, only losing a few points on the day. Equities attempted to rally after the Euro close, but the administration’s announcement of new tariffs weighed on the major indices. The Dow ended with significant losses and the SPX with a moderate loss.
At the close, the Dow gave up 1%, the SPX fell 0.69%, and the NDX slipped just 8.6 points. Breadth was negative, 1.9 to 1, on above average volume. ROC(10)’s moved lower with the SPX crossing back into negative territory. The NDX is the only major index remaining in positive territory.
RSI’s moved lower, with the NDX continuing to lead at 59.8. The Dow is now at 46.1 and the SPX at 50.9. The Dow and SPX MACD’s remain below signal, while the NDX continues above signal. The ARMS index ended the day at 1.64, a fairly bearish reading.
The choppy action this week is indicative of a topping pattern, yet we saw a “bull handle” developing over the last several sessions. We had an ‘engulfing bearish’ candlestick develop in Thursday’s session, so chart patterns are conflicted. The Dow and SPX remaining with their MACD’s below signal is a near term concern.
The Dow and SPX continue to remain below the 50% retrace levels of 25074 and 2726, respectively. The Dow closed at 24415, remaining below its 20D-SMA of 24628. It continues to hold its 50D-SMA of 24383. The NDX closed at 6967, above its 20D-SMA of 6897. It briefly traded above the 7000 handle before falling back late in the session. The SPX ended the day at 2705, finding support in the session at 2700. It remains below its 50% retrace level of 2726. It closed just below its 20D-SMA of 2707. The VIX added 3.2% to finish at 15.43.
Near term support for the NDX is at 6900 and 6897. Near term resistance is at 7000 and 7008. Near term support for the SPX is at 2700 and 2672. Near term critical resistance is at 2707 and 2726.
We get employment numbers this morning. Europe is significantly higher in early trade and U.S. Futures are significantly higher in the premarket. Major economic reports on tap today include the Employment Report at 8:30am, PMI Manufacturing at 9:45am, ISM Manufacturing at 10:00am, and Construction Spending at 10:00am.
Get The News You Want
The SPDR Dow Jones Industrial Average ETF (DIA) rose $1.42 (+0.58%) in premarket trading Friday. Year-to-date, DIA has declined -0.47%, versus a 1.94% rise in the benchmark S&P 500 index during the same period.
DIA currently has an Large Cap Value ETFs category.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.