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Today's Technical Outlook - 4/2/2018

Summary

Major Economic Reports Today PMI Mfg. Index-9:45am ISM Mfg. Index-10:00am Construction Spending-10:00am.

Market Summary David Chojnacki, Market Technician.

The major indices opened higher on Thursday and never looked back. Techs were finally having a good day and helping to push the NDX to significant gains. The FANG stocks were strong on the day as they look to build a bottom. The DJIA and SPX also closed with significant gains despite a last hour sell-off, before the long holiday weekend. The trading last week was choppy, but typical of indices looking to make a base. At the close on Friday, the DJIA was up 1%, the SPX closed up 1.3%, and the NDX added 1.86%. Breadth was decidedly positive, 3.4 to 1, on average volume. RSI’s moved higher with the DJIA leading at 43.1. The SPX ended at 42.7 and the NDX at 42.2. The ARMS index ended at 0.85, a bullish reading. For the week, the DJIA added 2.4%, the SPX gained 2%, and the NDX was up 1.1%. The VIX fell 12.6% on Friday to 19.97. For the week, the VIX was down 20%. This week, we get key manufacturing data and the Employment report at the end of the week.

Trading Trends

Long term, technicals were challenged again last week as the SPX and DJIA traded near their 200D-SMA. The DJIA 200D is at 23412 and the SPX is at 2589. Both indices also traded below their 1 Yr. Trend-lines of DJIA(23800) and SPX(2612). The DJIA and SPX are both now lower for the year. The NDX has held up long term, as its 200D-SMA is well below at 6267. Short term, the bias remains to the downside. The major indices tested 10% correction levels last week. All three major indices are well below their 50D-SMA’s: DJIA-25066, SPX-2729, NDX-6807. Near term technicals remain weak, although the major indices tried to form a bottom last week. All 3 major averages have their MACD’s below signal and are below their 20D-SMA’s. Europe markets are closed today. US Futures are pointing lower pre-market.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.