Dow Jones Industrial Average 2 Minute(INDEXDJX:.DJI): Strength Returns

The NAHB Housing Index came in just a little bit better than expected and Equities moved higher at the opening bell.   Investors seem to look beyond the new Trade Tariffs with China and pushed Industrial issues higher. The major averages moved higher throughout the session with only a minor sell-off in the last hour.   The NDX was the big winner as Techs, especially Semi’s, bounced back. The NDX and the SPX bounced off critical support levels, which helped to spur the advance. The Dow Jones Industrial Average (DJIA) was also strong as the old Industrial issues helped to move it higher.   The major indices had a good day, despite the 10YR finishing at 3.05%.

At the close, the DJIA added 0.7%, the SPX was up 0.54%, and the NDX gained 0.8%.  Breadth was slightly positive, 1.2 to 1, on above average volume. ROC(10)’s advanced in the session, with the SPX crossing into positive territory.  The NDX remained in the negative, while the DJIA continued in positive territory. RSI’s moved higher, with the DJIA the strongest at 66.3. The NDX ended at 51.4 and the SPX at 61.2.  All three major indices remain with their MACD’s below signal. The ARMS index ended the day at 0.66, a bullish reading.

As we noted above the SPX and NDX moved up from critical support levels.   The NDX kicked off from its 50D-SMA at 7429 and the SPX bounced off its 20D-SMA 2888.  The NDX traded above its 20D-SMA(7515) in the session, but the late day pullback had its close at 7494, just below.  If it gets back above its 20D-SMA today, it will be poised to retest the August record high of 7661.

The SPX closed at 2904, up 6 out of the last 7 sessions.  It closed above its 20D-SMA of 2888. The SPX is set to test its August record high of 2916. Its upper Bollinger Band® is at 2919. The DJIA closed at 26246, its best close since the January record highs.  The DJIA is pushing right up against its upper Bollinger Band® of 26261. It continues above its 20D-SMA of 25973. The VIX fell 6.5% to finish at 12.79.

Near term support for the NDX is at 7429 and 7400. Near term resistance is at 7515 and 7660.   Near term support for the SPX is at 2900 and 2888. Near term resistance is at 2914-16 and 2925.

Europe is higher in early trade Wednesday, and U.S. Futures are slightly higher in the premarket. The only major economic report due out today is Housing Starts/Building Permits at 8:30am.

The SPDR Dow Jones Industrial Average ETF (DIA) fell $0.21 (-0.08%) in premarket trading Wednesday. Year-to-date, DIA has gained 7.08%, versus a 9.31% 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 #4 of 82 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.