Nasdaq 100 Is Becoming The Must-Own Index As Dow, S&P Lag

Mixed Action Kicks Off The New Week

The market opened Monday flat, but quickly turned to the downside. Equities moved lower until late morning, when they finally caught a bid. The major averages were testing a few near term support levels, before a reversal to the upside. Once again, the NDX was the strongest of the indices and was able to eke a small gain which enabled it to close at a new high . The DJIA and SPX could not get back into positive territory and closed slightly lower. At the close, the DJIA was off 0.14%, the SPX gave up 6.1 points, and the NDX added 2.5 points. Breadth was positive, 1.2 to 1, on below average volume.

Technical Update

ROC(10)'s declined in the session, with the SPX joining the DJIA in negative territory. The NDX remains in positive territory. RSI's were mixed with the NDX rising and the DJIA and SPX falling. MACD's remain below signal for the DJIA and SPX and above signal for the NDX. The ARMS index ended the day at 1.79, a bearish reading.

The major indices continued to trade in a narrow range and tested some near term support levels. By the end of the day, the NDX closed at 5065, a new closing high. It fell 12 points short of last week's intra-day high of 5085, trading as high as 5073 in the session. It remains above its 20D-SMA of 4993.

The DJIA remains the weakest index near term , with an RSI of 53.2 and is below its 20D-SMA of 19868. It remains with the SPX, within the range of the 'Bull Handle' and continues poised to test the recent highs. The SPX closed right at its 20D-SMA of 2265. During the session it briefly traded below the 20D, down to 2257. Critical near term support is near 2232.

The VIX added 2% to finish at 11.78. It continues to indicate very little volatility in the markets. The DJT (Dow Transports) was one of the big losers, down nearly 1%. Near term support for the NDX is at 5050 and 5025. Near term resistance is at 5075 and 5085. Near term support for the SPX is at 2265, 2262 and 2250. Near term resistance is at 2271 and 2276.

Earnings Taking Center Stage Again

Europe is mixed in early trade, while U.S. Futures are slightly higher in the premarket. The only major economic report on tap today is Existing Home Sales at 10:00am. Other than that, a slew of earnings reports from the likes of Verizon , Johnson & Johnson , and Alibaba are bound to influence the major averages today.

The PowerShares QQQ Trust, Series 1 ETF ( NASDAQ:QQQ ) rose $0.13 (+0.11%) in premarket trading Tuesday. Year-to-date, QQQ has gained 4.20%, versus a 1.20% rise in the benchmark S&P 500 index during the same period.

QQQ currently has an ETF Daily News SMART Grade of A (Strong Buy) , and is ranked #1 of 32 ETFs in the Large Cap Growth ETFs category.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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