On Thursday, the Dow Jones Industrial Average extended its gains after closing over 20,000 on Wednesday. Technicians were happy to have the Dow extend its gains, since to them it was confirmation that the breakout was genuine.
However, even though the Dow closed higher, the S&P 500 fell less than 0.1%, and the Nasdaq was basically unchanged. All of the indices were positive until Mexican President Enrique Pena Nieto was “uninvited” to a meeting by President Donald Trump to discuss paying for “The Wall.”
Better-than-expected earnings from Boeing Co (NYSE:BA) helped the Dow achieve gains. BA’s 1.1% advance helped to offset a negative story about Verizon Communications Inc.’s (NYSE:VZ) proposed combination with Charter Communications, Inc. (NASDAQ:CHTR). VZ lost 1.3% and CHTR rose 7.4%.
Crude oil (WTI) gained 1.9%, closing at $53.75 per barrel. However, the energy sector of the 500 closed unchanged.
At the close, the Dow Jones Industrial Average gained 32 points at 20,101, the S&P 500 fell 2 points at 2,297, the Nasdaq lost a point to close at 5,655 and the Russell 2000 fell 7 points, closing at 1,376. The NYSE’s primary exchange traded 829 million shares with total volume of 3.5 billion shares. The Nasdaq crossed 1.8 billion shares. On the Big Board, decliners led by a slight margin, and on the Nasdaq, decliners led by 1.6-to-1. Blocks on the NYSE fell slightly from Wednesday’s total of 6,263.
The S&P 500 broke from resistance at 2,280 on Wednesday on a “Continuation Gap” and headed to slightly over 2,300 before reversing and closing lower by under 2 points. Volume was high enough to cancel out the increase on Wednesday, but MACD issued a new buy signal.
Conclusion: Yesterday’s reversal by my CBR (Collins Bollinger Reversal) indicator is signaling that the continuation gap from 2,285 to 2,289 will probably be closed by sellers, perhaps even today. This is normal following a major breakout as traders and computer programs jump in to nail down short-term gains.
But the signal has been given by the Dow averages that all is well. Both the Dow industrials (+32) and the Dow transports (+48) rose to a new high at 9,503. The transports’ break confirms that the bull market is intact.
I’ll provide charts of the Dow’s confirmation on Monday’s DTA.
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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