Dow Jones Industrial Average Kicks Off 2018 With A Solid Rally
Market technician Dave Chojnacki of Street One Financial recaps the first trading day of 2018, which saw solid gains to kick off the year, and updates the important technical indicators for investors and traders to focus on.
Stocks came roaring out of the gate on the first trading day of 2018. Big Tech was taking the lead, as they had been lagging the rest of the market at the end of 2017. Stocks pulled back somewhat mid-day, but were able to come back and close near their highs of the session.
The Nasdaq 100 (NDX) tied its record close during the session, but closed just a few points below. The S&P 500 (SPX) closed at its high of the session. It established a new closing and intraday high. The Dow Jones Industrial Average (DJIA) was the weakest of the big three, but managed to close with moderate gains.
At the close, the DJIA added 0.42%, the SPX was up 0.83%, and the NDX spiked 1.8%. Breadth was positive, 1.5 to 1, on average volume. ROC(10)’s were mixed, with the DJIA and SPX declining and the NDX advancing. All three remain in positive territory.
RSI’s inched up, with the DJIA continuing to be the strongest at 70.9. The SPX ended at 68.2 and the NDX at 63.6. All three major indices remain with their MACD below signal. This is mostly a result of nearly 10 sessions of trading in a narrow range. The ARMS index ended at 0.57, indicating the strength at the close.
It was a strong start to the New Year, as the Trump rally of 2017 flowed over into 2018. Big Techs and FAANG stocks did well, after consolidating somewhat last month. The NDX closed at 6511, just 2 points below its record close of 6513. Its high of the day was 6513, just 9 points below its record intraday high of 6522. It remains above its 20D-SMA of 6406.
The DJIA closed at 24824 and traded as high as 24864. Its record close is at 24837. It continues to target the 25000 level.
The SPX ended at a new closing and intraday high record high of 2695. Its 20D-SMA level of support is at 2667. The VIX fell 11.5% to 9.77.
Near term support for the NDX is at 6500 and 6450. Near term resistance is at 6513 and 6522. Near term support for the SPX is at 2675 and 2667. Near term resistance is at 2700 and 2712.
Europe is higher in early trade Wednesday, and U.S. Futures are pointing moderately higher in the premarket. Major economic reports on tap today include ISM Mfg. Index at 10:00am, Construction Spending at 10:00am, and the FOMC Minutes at 2:00pm.
The SPDR Dow Jones Industrial Average ETF (DIA) was unchanged in premarket trading Wednesday. Year-to-date, DIA has gained 0.26%, versus a 0.72% rise in the benchmark S&P 500 index during the same period.
DIA currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #3 of 80 ETFs in the Large Cap Value 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
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.
