For the week ending October 30th, I wrote a post on the state of the 4 major US stock market indices. This post included the Dow Jones Industrial Average, NASDAQ Composite, S&P 500, and the Russell 2000, as all were at or near important resistance levels.
These levels would provide clues as to whether the bullish sentiment was still intact or if the market was becoming exhausted.
Now, 5 trading sessions later, let’s take a look at what the market told us. Here’s a rundown of the major stock market indices:
- The Dow Jones Industrial Average (DJIA) added +1.39% and has closed above trend line resistance that began in 2011.
- The NASDAQ Composite (COMPQ) added +1.84% and has closed 5 consecutive weekly candles above trend line resistance that began in 2012.
- The S&P 500 Index (SPX) added +0.95% and has closed 3 consecutive weekly candles above trend line resistance that began in 2011.
- The Russell 2000 added +3.26% and has closed above trend line resistance that began in 2011.
That said, in the following 4 charts, you’ll see where all 4 stock market indices are entering into a tight zone where there is likely to be a tug-of-war between the bulls and bears.
Dow Jones Industrial Average – 5 Year Weekly Chart
NASDAQ Composite – 5 Year Weekly Chart
Standard & Poor’s 500 Index – 5 Year Weekly Chart
Russell 2000 Index – 5 Year Weekly Chart
In my opinion, swing and/or position traders should watch price very closely going into the Christmas buying season especially if and when they reach the current highs that can be seen on the charts (i.e. watch for breakouts). The S&P 500 and the NASDAQ are particularly close to those overhead levels now.
It’s worth noting there are 843 companies reporting earnings the week of November 9th.
Thanks for reading and remember to always use a stop.
No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.