January 15, 2021

Stock Market Breadth: Biden Calls For Stimulus Help

Stock Market Breadth: Biden Calls For Stimulus Help

President-elect Joe Biden revealed his stimulus plan worth $1.9 trillion dollar. The coronavirus rescue package calls for stimulus cheques, unemployment support, an increase in the federal minimum wage to $15 per hour and much more. 

Asian Markets 

The Asian stock market traded mostly flat on the final trading day of the week. The Shanghai index advanced 0.01%. The HSI index increased by 0.16%, while the ASX index remained flat. The Nikkei index dropped by 0.62%.

Dow Jones and S&P 500: Market Breadth

The Dow Jones’ market gained further strength as the rally continues. 87% of the Dow Jones stocks traded above their 200-day moving average

The S&P 500 stock breadth is maintaining its momentum. 87% of the shares traded above their 200-day moving average. 

Dow Jones Futures Today

The Dow Jones futures are trading lower today. In terms of economic data, investors will be looking at the Core Retail Sales m/m data and Retail Sales m/m number. In addition to this we also have the Empire State Manufacturing Index today.  The forecast for Core Retail Sales is -0.1%, for Retail Sales is 0.0%  and Empire State Manufacturing is 5.7.  

The Dow Jones futures are trading sharply lower today and the Dow Jones price has moved inside the Bollinger Band. It seems like that the current correction is likely to push the Dow price towards the 20-day SMA.

There is no doubt that the index was due a correction for a long time as it went too far and too fast. Having said that, the bulls are still in control of the price as the Dow is still trading above the 50, 100 and 200-day SMA on the daily time frame. The near term support is at 20,333, while the resistance is at 31,153.

The S&P 500 futures, which represent the broader stock market, are also trading lower today. The Relative Strength Index shows that the S&P 500 is overbought as the RSI is trading near the 70 mark.

A level of 70 is associated with overbought and this means that the price is likely to face a sell-off and a level of 30 usually means the asset is over oversold—meaning an upward move is more likely.

Just like the Dow Jones, the S&P 500 is also trading above the 50, 100 and 200-day SMA, which confirm that bulls are in control of the price.

The near term support is at 3643, while the resistance is at 3803.     

Stock Market Rally

The S&P 500 stock index closed lower yesterday; the index declined by 0. 38%. The technology sector led the index lower – 7 out of 11 sectors closed lower. 

The Dow index failed to secure any gains yesterday; the Dow stocks moved the index lower by 0.22%. 14 shares advanced while 16 shares closed lower. 

The NASDAQ composite, a tech-savvy index, closed lower by 0.12% yesterday. 

S&P 500 Leaders and Laggards: HollyFrontier and MSCI

HollyFrontier stock contributed the biggest gain, soaring 11%. MSCI stock was the largest drag; it fell by 6.59%. The S&P 500 stock index is up 9.6% so far this year.

Dow Jones Leaders and Laggards: Salesforce and Goldman Sachs

Goldman Sachs provided the biggest help for the Dow Jones; it advanced by 1.63%, while Visa was the largest decliner, it fell by 3.58%.