Dow Jones Industrials: Has its Hour Come?
The Dow Jones Industrial Average has lagged the broader market for a long time because of its relative lack of concentration in large growth stocks. Could that become a virtue as sentiment shifts away from megacaps?
The first pattern on today’s chart is 40,000. DJI stalled at this psychologically important level in May but ripped through it early in the second half. The index pulled back and bounced there last week. Has old resistance become new support?
Second, the breakout was preceded by a series of higher weekly lows. That may suggest that longer-term buyers were active.
The 50-day simple moving average (SMA) was close to the 100-day SMA in early July, which may create potential for price expansion. Also notice how the 8-day exponential moving average (EMA) is above the 21-day EMA. That may reflect a bullish short-term trend.
The short-term EMAs interestingly contrast with the S&P 500 and Nasdaq-100. (Both have faster EMAs below the slower ones, which is potentially bearish.)
Here’s another notable difference: DJI’s pullback last week retraced a mere nine sessions of upward movement. SPX and NDX erased more than 25 days of gains. That could also signal more short-term strength.
Last, TradeStation data shows that Financials just took leadership to become the top-performing sector on a year-to-date basis. They also have the biggest weighting in DJI.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. See our Overview for more.
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at https://www.TradeStation.com/DisclosureOptions. Before trading any asset class, customers must read the relevant risk disclosure statements on https://www.TradeStation.com/Important-Information/. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit [url =tradestation.com/DisclosureTSCompanies] TradeStation.com/DisclosureTSCompanies for further important information explaining what this means.
The first pattern on today’s chart is 40,000. DJI stalled at this psychologically important level in May but ripped through it early in the second half. The index pulled back and bounced there last week. Has old resistance become new support?
Second, the breakout was preceded by a series of higher weekly lows. That may suggest that longer-term buyers were active.
The 50-day simple moving average (SMA) was close to the 100-day SMA in early July, which may create potential for price expansion. Also notice how the 8-day exponential moving average (EMA) is above the 21-day EMA. That may reflect a bullish short-term trend.
The short-term EMAs interestingly contrast with the S&P 500 and Nasdaq-100. (Both have faster EMAs below the slower ones, which is potentially bearish.)
Here’s another notable difference: DJI’s pullback last week retraced a mere nine sessions of upward movement. SPX and NDX erased more than 25 days of gains. That could also signal more short-term strength.
Last, TradeStation data shows that Financials just took leadership to become the top-performing sector on a year-to-date basis. They also have the biggest weighting in DJI.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. See our Overview for more.
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at https://www.TradeStation.com/DisclosureOptions. Before trading any asset class, customers must read the relevant risk disclosure statements on https://www.TradeStation.com/Important-Information/. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit [url =tradestation.com/DisclosureTSCompanies] TradeStation.com/DisclosureTSCompanies for further important information explaining what this means.
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