Market technician Dave Chojnacki of Street One Financial recaps Tuesday’s much-needed market pullback and updates the important technical indicators for the major U.S. averages.
Economic reports came in as expected and had little impact on equities at the open. Investors were focused on interest rates as the pushed through 3% and then through the 3.05% resistance level. It ended the day at 3.08%. This spooked traders, prompting them to sell equities. The selling was across the board, but especially hit Techs which have been the strongest recently.
The only Tech sector that did well was Semi’s, for the second straight day. The selling was orderly, as there was no mass exodus for the door. The (DJIA) ended its 8 day win streak, closing with a moderate loss. The (NDX) and S&P 500 (SPX) ended with moderate to significant losses.
At the close, the DJIA fell 0.78%, the SPX lost 0.68%, and the NDX was down 1%. Breadth was decidedly negative, 1.8 to 1, on average volume. ROC(10)’s declined in the session, however, all three major indices remained in positive territory.
RSI’s fell, with the NDX still the strongest at 58. The DJIA is now at 56.1 and the SPX at 57. All three major averages continue with their MACD above signal. The ARMS index ended the day at 0.88, a slightly bullish reading.
The DJIA moved back in the negative for the year, falling below its 2017 close of 24719. The major indices did hold on to key technical support. The DJIA closed at 24706 and remains above its 50D-SMA of 24424. It continues to be unable to push through the 50% retrace level of 25074.
The SPX closed at 2711, falling back below its 50% retrace level of 2726. It continues to hold its 50D-SMA of 2678,