In America:Dow Industrials +1.67%Dow Transports +1.48%SP500...

In America:

Dow Industrials +1.67%
Dow Transports +1.48%
SP500 +1.65%
Russell 2000 +1.01%
Nasdaq100 +1.4%

Comment: A strong night on good volume. Breadth was a little suspect with the R2K the weakest of the indices cited above.

NewHighs/NewLows 173/61 NH>NL. The ratio of NH/(NH+NL) is at 73.9%. Out of the Do Not Sell Zone. New Highs were dominated by fixed income securities which often do well in a falling market. New Lows remain above 50 – that is still showing extreme nervousness amongst some investors.

Technical Comment on the Dow 30:

The Dow finished at 12887.9. Support/Resistance: 12500/13000 (round figures).
Indicators:
MACD Histogram. Marginally above zero. Neutral.
MACD. Marginally above zero. Neutral.
RSI.9 is at 58.4. Positive.
Stochastic. 48.4. Below its signal line but kicking up from previous levels which provided support. Neutral.
CCI.14: +79.6. Positive.

The 10-DayEMA (blue dotted line) is above the 20-DayEMA (red dotted line). Positive.

The medium term trend is up. The short term trend is up.

The Dow 30 is once again heading back to the top of the gentle up trend channel. Let’s see what happens when it gets there.

The Nasdaq100 continues to be a concern. The gap formed four days ago hasn’t been closed and the chart remains below the long term down trend line from early April (with a small bull trap a few days ago). Critical support lies at the red oblique support line. A break below that would be very bearish.

The Federal Reserve Board meets on July 31. The market has tended to rise prior to Fed meetings. The rise yesterday and today looks consistent with that history. Draghi’s comments about the ECB ready to take action also helped today’s big push up. Talk and action are, of course, two different things. But the market liked the talk.

Redbacka