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

Nikkei 225: Buy signal close?

Nikkei 225 Japan stock index: Is a buy signal close?

 

The technical chart doesn't look so good for the Nikkei 225. It has been showing lower lows for quite a while now and it failed to form a bottom during the last two weeks.

Let's check where we are standing with the market breadth data?

 


As you can see, the long-term indicator McClellan Summation Index formed a top and then began its rapid decline. It's a positive thing, however, that it did not decline any further during this trading day.

The short-term indicator McClellan Oscillator has been below the zero line for 6 days in a row and is now near zero again. 

Some consider crossing the zero line a buying signal, so one could hope for a good trading session tomorrow and then have a trigger for a long trade.

It's not so clear for me, though. The secondary trend of the Nikkei 225 is downwards, meaning one would buy against the current trend. So if you are looking for a buy signal, maybe combine positive market breadth data with classic chart data. E.g. wait for the index to trade higher than this intermediate top on 12.08.2021 and check if market breadth data supports this.

Please also note that we have an upcoming event risk this week with the US Fed meeting.


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