State of Dow Jones - Calendar Week 41 2021

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State of Dow Jones - Calendar Week 41 2021 Welcome to the second episode of the blog post series "State of Dow Jones", where we look at the leading US stock index from different perspectives and try to determine how solid the current development is. Technical Chart for Dow Jones Every "State of Dow Jones" blog post should start with the technical chart, so here we go (created on tradingview.com): The Dow Jones overcame the old falling highs and the important resistance at 25 000, now trading at 35 294 points. The index is trading above its SMA 20 again and even went into the upper Envelope band. This means the Dow is slightly overheated and it is likely that the index will show a small pull-back before rising again. The RSI is at 60, three trendlines were identified and crossed during the last trading days. The technical chart provides us with enough confidence to say that the correction might be over and the outlook is neutral, or maybe even slightly bullish. Marke

State of Dax - Calendar Week 27

 

Let's have a look at the biggest stock market index in Germany, the DAX (30) (or sometimes also called GER 30).
 
What is the state of Dax as of 11.07.2021? There is a small surprise hidden in the data this week.
 

DAX members above SMA50, SMA100 and SMA 200



Compared to last week, more members are now above their SMA 50, but fewer are above SMA 100. The number of index members above SMA 200 did not change.
 
Those are still good values, showing that the trend is sideways, but there is no big warn signal regarding bearish scenarios.
 
Let's see how those values developed during the last 90 days:

 
Those lines undermine the fact that the positive trend turned into a sideways trend, with fewer index members being on the (fast) rise.
But, for the first time since end of April, the amount of index members trading above their SMA 50 has become bigger than the amount of index members trading above their SMA 100. This is a positive signal, however not necessarily a strong one since it needs further confirmation.
The best way to look at the data would be that a very bearish scenario for the upcoming weeks has become less likely.

Breadth data - advanced vs. declined, McClellan and so on

 

 
The ADVANCE DECLINE LINE did not change much during this trading week. When only looking at the last 10 days, we've seen a lower low on Thursday, but it's not something to worry about since this lower low his higher than the previous low on the bigger time frame (30.06.2021).  The ADVANCE DECLINE LINE simply confirms the sideways trend at the moment, with a very small bullish outlook.
The ADVANCED vs. DECLINED indicator oscillated between bigger extremes during the last 10 days, which is not necessarily bad. One could use this indicator as a confirmation for anti-cyclic trading decisions. 
 
 



On the short time frame, the McClellan Oscillator doesn't give so many clear signals at the moment. If you're relying on this indicator, you should wait for your next moves until clear signals form out. 
On the long time frame, the McClellan Summation Index looks more interesting. If you are into anti-cyclic or swing trading, this might be the signal you're looking for.
 

Summary

When looking at this technical data only, there is more reason to be optimistic than being pessimistic. If you are looking at time windows which are not days but several weeks, there is a good chance that the Dax will attract enough buyers to move upwards. However, let's not become too enthusiastic, since we are not looking at very big moves at the moment. 


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