DJIA Enters Overbought Territory With Yet Another Record

DJIA Enters Overbought Territory With Yet Another Record

Technical analyst Dave Chojnacki of Street One Financial examines the state of the U.S. equities markets with a deep look at the internal technical factors playing a big role in pushing the major indexes to new highs day after day.

Equities got off to a mixed start on Tuesday morning, as PPI numbers came in as expected. The (DJIA) and (SPX) were moving to the upside, while the (NDX) was taking a breather. Techs had been pushing the NDX to the upside for 5 straight sessions.

Techs were weaker on Tuesday, as were many small-cap issues. IWM () was down for the second day in a row. This action did not interrupt the DJIA and SPX, however, as they managed to hold on to early gains for new record closing and intraday highs. Volume was low again and momentum was weak, however.

At the close, the DJIA was up 0.49%, the SPX eked out a gain of 4.1 points, and the NDX fell 0.16%. Breadth was slightly negative, 1.2 to 1, on below average volume. ROC(10)’s declined across the board. The DJIA and SPX remained in positive territory, while the NDX continued in negative territory.

RSI’s were mixed, with the DJIA (77.5) and SPX (74.7) inching higher and in overbought territory. The NDX ended lower at 59.3. The DJIA and SPX remain with their MACD above signal, while the NDX remains below. The ARMS index ended at 0.65, a bullish indication at the close.

The DJIA closed at 24504, the third record high in as many sessions. It traded as high as 24552. It continues well above its 20D-SMA of 23875, its first level of critical support.

The NDX ended its string of gains, but was only off slightly. It closed at 6383, above its 20D-SMA of 6339. The NDX met resistance right near 6400, at 6403. It continues below its record closing high of 6422.

The SPX closed at 2664, its third record high in a row. The SPX traded as high as 2669 in the session, comfortably above its 20D-SMA of 2617. The finished to the upside, gaining 6.2% to 9.92. It remains at extremely low levels.

Near term support for the NDX is at 6350 and 6339. Near term resistance is at 6400 and 6422. Near term support for the SPX is at 2650 and 2625. Near term resistance is at 2665 and 2675.

Europe is mixed in early trade Wednesday, and U.S. Futures are also mixed in the premarket. Major economic reports on tap today include at 8:30am, EIA Report at 10:30am, and the all-important FOMC Announcement at 2:00pm.

The SPDR Dow Jones Industrial Average (SI:) ETF rose $0.17 (+0.07%) in premarket trading Wednesday. Year-to-date, DIA has gained 26.13%, versus a 20.45% rise in the benchmark 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.