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Saturday, April 10, 2021

The scale of the US stock market continues to improve, but the volume of transactions is declining

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Stocks continue to rise as traders remain confident about the US economic recovery. Federal Reserve Chairman Jerome Powell also confirmed yesterday that he will not make a hasty decision on loose monetary policy.

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However, speculators are in doubt, and they are eager to sell short in the stock market for two reasons. First, they see no evidence of high volume as the Dow Jones Industrial and S&P 500 are posting record highs. Second, they firmly believe that rising bond yields could end in some sort of catastrophe.

Only time will tell who is right, but fund flows indicate that this week we have seen money coming out of the most liquid ETF, the SPY, which represents the S&P 500. But we have seen an influx. huge in QQQ ETF, which mirrors the Nasdaq
NDAQ
.

Asian markets

The Asian stock market traded mostly higher today. The Shanghai index rose 0.08%. The HSI index rose 1.16%, while the ASX index gained 1.02%. The Nikkei index fell 0.07%.

Dow Jones and S&P 500: market size

The scale of the Dow Jones market accelerated again yesterday. 93% of Dow Jones stocks traded above their 200-day moving average.

The size of S&P 500 stocks also showed strength yesterday. 94% of stocks traded above their 200-day moving average.

Dow Jones Futures today

Dow Jones futures are trading higher today. In terms of economic data, these were only the initial jobless claims numbers in the United States, which came out much weaker than expected. The actual number arrived at 744K while the forecast was 682K. This number is known to be volatile as last week we saw a dramatic increase in this number.

The Dow Jones Industrial Average has seen a tremendous rally in recent weeks. There is no doubt that the price has gone too far and too fast, and that could be the reason why we have started to see the Dow consolidating now.

It is likely that we could witness a healthy correction as the Relative Strength Index hit 70, a level which indicates that prices are too rich and subject to some sell-off. That said, the uptrend is firmly intact as the Dow Jones price is trading above the 50, 100 and 200 day SMA on the daily period. As long as the price continues to trade above these averages, we have nothing to worry about.

Short term support is at 32,864 while resistance is at 33,670.

Stock exchange rally

The S&P 500 stock index closed higher yesterday; the index rose 0.15%. The communications sector led the index higher and 5 of 11 sectors closed lower.

The Dow index soared yesterday; Dow stocks pushed the index up 0.05%. 16 stocks advanced, while 14 stocks closed lower.

The NASDAQ composite, a tech-savvy index, closed slightly down 0.07% yesterday.

S&P 500 leaders and laggards: L Brands
KG
and Albemarle Corp

L Brands stock contributed the largest gain, rising 3.62%. Albemarle Corp’s stock was the biggest drag; it fell by 6.01%. The S&P 500 stock index is up 1.74% so far this year.

Dow Jones leaders and laggards: JP Morgan and Walt Disney
Dis

JP Morgan provided the biggest help for the Dow Jones yesterday; it grew 1.57%, while Walt Disney was the biggest decline, it fell 1.14%.

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