When, Oh When, Will the Dow Jones Industrial Average Hit 20K?

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On Tuesday, stocks achieved a small, light-volume gain, but the Dow Jones Industrial Average failed again to achieve the barrier at 20,000.

The Dow Jones rose 0.06%, but hasn’t moved an advance or decline over 1% since December 7. And the Dow is not the only index to achieve modest gains: The S&P 500 gained 0.2%, the technology-heavy Nasdaq rose just 0.5%; however, the Russell 2000 (small-caps) rose 0.5%, leading as it has for most of 2016.

Nine of the S&P 500’s 11 sectors finished in positive territory. Nvidia Corporation (NASDAQ:NVDA) led the techs with a gain of 6.9% for a YTD gain of 256%. The retail sector enjoyed a push from Amazon.com, Inc. (NASDAQ:AMZN), up almost 11 points after management said that sales this year would exceed expectations.

Energy stocks rose modestly, resulting from a gain in WTI crude oil (February contracts) of 1.66% to $53.90 per barrel.

At the close, the Dow Jones Industrial Average gained 11 points to finish at 19,945, the S&P 500 was five points higher at 2,269, the Nasdaq rose 25 points to 5,487, and the Russell 2000 closed at 1,378 for a gain of six points.

The New York Stock Exchange’s primary exchange traded less than 500 million shares with total volume of 2 billion shares, while the Nasdaq crossed 1.2 billion shares. On the Big Board, advancers outpaced decliners by 1.6-to-1, and on the Nasdaq, advancers led by 1.5-to-1. Blocks on the NYSE rose to 5,683 from 5,304 on Friday.

Dow Jones Industrial Average resistance
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Russell 2000

The current pattern on the Dow Jones Industrial Average’s chart is an ascending wedge (triangle). This pattern requires volume to punch it through. It is a mere 55 points from a breakout, but instead of the volume increasing it is declining, and sellers are appearing with blocks  on the close.

Dow Jones Transports chart
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The Dow Jones Transportation Average’s chart shows a bullish flag, however flags usually break out as a result of buyers, but this flag is extending its tail on declining volume. The closing high at 9,425 is becoming more difficult for even positive volume to catch.

Conclusion: The industrials and the transports are finding it difficult to overcome the negative volume that is appearing in large blocks of selling on the close of each day. This tells us to hold off any purchases until we observe buyers-on-the-close rather than sellers-on-the-close.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/12/dow-jones-industrial-average-20k-when/.

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