DOW INDUSTRIALS REACH THREE MONTH HIGH -- TWO OF ITS BIGGEST GAINERS ARE MICROSOFT AND VISA -- S&P 500 EXCEEDS LAST FRIDAY'S HIGH -- MIDCAPS EXCEED 50-DAY LINE -- SMALL CAPS MAY BE NEXT -- FACEBOOK AND ADOBE LEAD QQQ HIGHER
DOW INDUSTRIALS NEAR 2015 HIGH ... Stocks are having a strong day. More importantly, several stock indexes are breaking through overhead resistance barriers, or are very close to doing so. Chart 1 shows the Dow Jones Industrial Average trading at the highest level in nearly three months. That puts it in position to challenge its record high set at the start of March. Its biggest percentage gainer is Microsoft (MSFT) which is moving up toward its recent high (Chart 2). Chart 3 shows Visa (V) nearing a record high. Other percentage leaders are Apple (AAPL), UnitedHealth (UNH), United Technologies (UTX). All three are trading back over their 50-day averages.
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Chart 1
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Chart 2
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Chart 3
S&P 500 NEARS OLD HIGH AS SMALLER STOCKS IMPROVE... Chart 4 shows the S&P 500 Index trading above last Friday's high, and on track to challenge its April intra-day high. It's also on track to register a new record close. Smaller stocks are rising as well. Chart 5 shows the S&P 400 Mid Cap Index climbing back over its 50-day average. Chart 6 shows the S&P 600 Small Cap index close to doing the same. It's a good sign when all three indexes are moving up together. All nine market sectors are in the green, with the biggest gains in technology.
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Chart 4
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Chart 5
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Chart 6
FACEBOOK AND ADOBE LEAD NASDAQ HIGHER... It's normally a good sign when the Nasdaq 100 is leading the market higher, as it's doing today. Chart 7 shows the PowerShares QQQ rising above last Friday's high to turn its short-term trend upward. Its also well above its 50-day moving average. One of the big QQQ leaders is Facebook (FB) which is up nearly 4% today (Chart 8). It's trading over its 50-day average, after surviving a test of its 200-day line earlier in the week. Chart 9 shows Adobe (ADBE) surging more than 3% and in position to challenge its record high set during the first quarter. Those two stocks are also among the top gainers in the S&P 500.
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Chart 7
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Chart 8
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Chart 9
EAFE ISHARES REACH TEN-MONTH HIGH... Foreign stocks are also having a strong day. Chart 10 shows MSCI EAFE iShares (EFA) trading at the highest level since last July. Most of today's gains are coming from Europe. A close above last summer's high would put the EAFE at a new record high. [EAFE includes stocks in developed markets in Europe Australasia and the Far East]. Since global stocks are positively correlated, it's a good sign for the U.S. when foreign shares are rising. A falling dollar is also giving a boost to foreign stock ETFs (which are quoted in dollars). A pullback in bond yields may also be contributing to some stock buying today.
