After 2 days of anemic trade, equities gapped up at the open on Wednesday and gained strength during the session. FED chairwoman Yellen in her speech hinted at a more dovish FED position. This lowered the odds of a rate hike in the future and pushed equities higher. This time the rally was across the board as all major indices moved higher. Techs were strong enough to propel the NDX to significant gains and the strongest on the day. The DJIA stood out, in that its moderate gains lead to new highs. The SPX also ended with a moderate gain. At the close, the DJIA gained 0.57%, the SPX added 0.73%, and the NDX moving up 1.2%. Breadth was decidedly positive, 3 to 1, on below average volume. ROC(10)’s advanced and all three major indices moved into positive territory. RSI’s were higher, with the DJIA continuing to lead at 61.1. The SPX is at 57.1 and the NDX at 56.1. The NDX MACD crossed above signal, while the DJIA
and SPX remain below. The ARMS index ended the day at 1.18, a slightly bearish reading. It was the best day we have seen for equities since the end of June. Volume, however, did not provide much conviction to the move. The DJIA, which has been the strongest index, broke out to a new closing high of 21532 and an intra-day high of 21580. It closed just below its top Bollinger Band of 21539. The NDX’s significant gain, pushed its MACD above signal, which is a good near term signal. The NDX also closed above its 50D-SMA of 5720. The SPX closed at 2443, above its 20D-SMA of 2431. It is 10 points below its record high of 2453. The IWM(iShares Russell 2000) was up 0.77% to 141.37. The VIX fell 5.4% to 10.30. Near term support for the NDX is at 5750 and 5720. Near term resistance is at 5800 and 5831. Near term support for the SPX is at 2431 and 2425. Near term resistance is at 2450, 2453 and 2462. Europe is higher in early trade. US Futures are pointing slightly higher in the pre-market.
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