December 3, 2020

Stock Market Maintains Its Cautious Tone

Stock Market Maintains Its Cautious Tone

The dollar index has weakened further, and this weakness in the dollar index is pushing the other currencies higher (more about currency strength). For instance, the EUR/USD and GBP/USD have both moved higher.

As for the equity markets, investors are certainly optimistic about vaccine approval, the UK approved the Pfizer vaccine this week, and the hope is to see more approvals. Stimulus negotiations are on the way as Nancy Pelosi and Chuck Schumer are both eager to start the negotiations.

The Asian stock market edged higher during the session today. The ASX 200 index closed with a gain of 0.38%. The Korean Kospi index advanced 0.66%, while the Nikkei index advanced 0.03%. The Shanghai index fell by 0.21%.

Dow Jones and S&P 500: Market Breadth

The Dow Jones’ market breadth is maintaining its strength. 90% of the Dow Jones stocks traded above their 200-day moving average.  

The S&P 500 stock breadth is overcoming its challenges. 91% of the shares traded above their 200-day moving average.

Dow Jones Futures Today

The Dow Jones futures are trading lower by 25 points today. In terms of economic data, investors will be looking at the US unemployment claims data. The forecast for the data is 775K, while the previous reading was at 778K. 

The Dow Jones futures have formed an ascending triangle pattern on the daily time frame. These chart patterns usually break to the upside and this means that the Dow Jones can easily move higher by another 1,000 points.

Overall, the bulls are firmly in control of the price as the index is trading above the 50, 100 and 200-day SMA on the weekly time frame. The RSI of the Dow Jones index is trading close enough to overbought zone and this means that the stops should be kept tight. In terms of support and resistance, the nearest support is at 28,925 and the resistance is at 32,000.

The S&P 500 futures, which represent the wider stock market, are trading near their new all-time high. The price has shown a strong upward momentum since its recent pullback which took place on the 9th Nov.

In addition to this, the S&P 500 index is also trading above the 50, 100 and 200-day SMA on the daily time frame, a further confirmation of an uptrend. The near term support is at 3545 and resistance is at 3800.

Stock Market Rally

The S&P 500 stock index recorded more gains yesterday; the index advanced 0.18%. The energy sector led the index higher – 6 out of 11 sectors closed higher. 

The Dow index closed near its new record high yesterday; the Dow stocks moved the index higher by 0.20%. Twenty-two shares advanced, while eight shares closed lower. 

The NASDAQ composite, a tech-savvy index, closed higher by 0.01% yesterday. 

S&P 500 Leaders and Laggards: NetApp and Salesforce 

NetApp stock contributed the biggest gain, soaring 9.36%. Salesforce was the largest drag; it fell by 8.53%. The S&P 500 stock index is up 9.1% so far this year.

Dow Jones Leaders and Laggards: Boeing and Salesforce

Boeing provided the biggest help for the Dow Jones; it advanced by 5.09%, while Salesforce was the largest decliner, it fell by 8.53%. 

Bitcoin 

The crypto king is consolidating, currently bitcoin is trading in a range of 19,500 to 18, 700. XRP also lacks momentum as the price is around 0.62

See a trading opportunity? Open an account now!