• Price Change UP Icon Gold $2,231.00 +41.00
  • Price Change UP Icon Silver $24.95 +0.39
  • Price Change UP Icon Platinum $915.00 +11.00
  • Price Change UP Icon Palladium $1,026.00 +25.00
Diversification
August 9, 2023

Can the Dow sustain all-time highs while component stocks have technical breakdowns?

Bloomberg, by Michael Kahn in
Share On Social Media

‘The Dow Is Rising, but Big-Name Stocks Are Hurting

Big names such as GE, Travelers, Coke, and J&J look weak on the charts.  That could signal danger.

At first glance, the Dow Jones Industrial Average looks pretty good on the charts.  A relentless rising trend and market-leading performance by big stocks should be permission for investors to just enjoy the ride without using any fancy strategies.

But traditional indicators such as the advance-decline line can mask deeper problems.  When several component stocks in the Dow collapse behind the scenes, it’s worth taking a closer look.

Is ‘collapse’ too strong a word for what has happened over the past few days?  That depends on your personal market opinion, but insurance giant Travelers Cos. nose-dived Tuesday to the tune of 3.8%.  At its worst level, it was down 5.1%, but the real story is that the decline formed a downside breakaway gap on the chart.”

”The point is that while we focus on big rallies in tech giants such as Microsoft and Intel, there are more severe negative reactions that seem to be overlooked.  Normally, when an index moves higher despite such bad news it is a bullish signal.  But in this case, we have to wonder if leadership within the Dow will soon narrow to the point where the rising trend is unsustainable.

What will the tipping point be?  That is impossible to know, but if the rest of earnings season provides chart action with a similar ratio in favor of breakdowns, then it is a good bet that the Dow itself has started to roll over.

For now, the trend is still to the upside.  The takeaway is to watch the breadth data on big stock indexes.  If they start to weaken more than they already have, then broad market price weakness is likely to follow.”

*This information is solely an excerpt of a third-party publication and is incomplete. Please subscribe to the referenced publication for the full article. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.

Get Your Free Report
A Rising Storm
All form fields are required *
Thank You

Want your kit sooner?

Faster delivery
is available by phone.

800-444-8317

Download Your Report

Enter your phone number to be connected to a Monex Account Representative.

Thank You
Want your kit sooner?

Faster delivery is

available by phone.

800-444-8317
All form fields are required *
Embed Spot Prices!
Copy and Paste below code into your HEAD tag / before end tag of body to embed chart.
Copy and paste code below wherever you want your chart displayed.
Copied to clipboard
Embed This Chart!
Copy and Paste below code into your HEAD tag / before end tag of body to embed chart.
Copy and paste code below wherever you want your chart displayed.
Copied to clipboard
FREE REPORT OFFER
A Rising Storm
Thank You
Please check your email for a confirmation link and Free Report!
I agree to receive news and promotional material from this website and understand I can cancel at any time. Privacy Policy