The Dow Jones Industrial Average rallied to a new high on Thursday, but will the rest of the market follow?
While the Dow broke to a new two-year high last week, the other important indices failed to follow through yesterday. Those important “other indices” include not just the small- and mid-caps, like the Russell 1000, but the Russell 3000, which covers 98% of all stocks, and even the S&P 500.
This “non-confirmation” casts doubt on the Dow’s breakout.
Meanwhile, silver and gold broke to new highs. And volume on the NYSE fell to a mere 697 million shares, while the Nasdaq traded just 405 million shares — one of its lowest volume days of the year. This is not the stuff that normally precedes broad moves in the stock market.
Until the “broad market” confirms the breakout, this fundamental “non-confirmation” theory of technical analysis must keep us less than bullish. We cannot allow our analysis to be based upon just one index, especially if the index is composed of just 30 stocks as the Dow is.
For a top gold stock selling at a discount, see the Trade of the Day.
Today’s Trading Landscape
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.
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