by Sam Collins | January 8, 2013 2:31 am
Stocks opened lower on Monday, and spent most of the day gaining back about half of the early losses. Eight of the S&P 500’s 10 sectors ended modestly lower on a day of slow trading in a limited range.
At the close, the Dow Jones Industrial Average was off 51 points at 13,384, the S&P 500 fell 5 points to 1,462, and the Nasdaq lost 3 points at 3,099. The NYSE traded 625 million shares and the Nasdaq crossed 361 million. On the Big Board, decliners were ahead of advancers by 1.2-to-1, and on the Nasdaq, decliners led by 1.4-to-1.
Last week, while the more volatile indices were breaking to new highs, the Dow industrials barely managed to punch through the near-term resistance line. That line, now at 13,300, is the Dow’s first line of support with the next support at the 50-day and 200-day moving averages just above 13,000. MACD is on a buy signal.
For most of Q4, Dow theorists worried that the Dow Jones Transportation Average had not made new highs when the industrials broke out in October. Now the reverse has taken place: Last week, the transports broke to new highs leaving the industrials in the dust. MACD is very overbought, and so we may see a modest retracement of the index.
Conclusion: All of the indices are overbought; however, January’s powerful opening is evidence enough that the bull market is alive and well. The Dow Jones Industrial Average will probably take a month to catch up, but in a market that is flush with cash and strong technical signals, all ships should eventually rise — even the “Dogs of the Dow.”
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.
Source URL: https://investorplace.com/2013/01/daily-stock-market-news-the-bull-is-alive-and-well-in-this-overbought-market/
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