BOEING AND CATERPILLAR LEAD INDUSTRIAL SPDR HIGHER -- THE DOW INDUSTRIALS ARE BREAKING OUT TO THE UPSIDE -- SO ARE THE TRANSPORTS -- THAT SIGNALS A DOW THEORY BUY SIGNAL IN THE MAKING
INDUSTRIAL SPDR IS BREAKING OUT ... Good news on the tariff dispute with China is giving a big lift to stocks today. While all sectors are gaining ground, the day's leader is the industrial sector. Chart 1 shows the Industrial SPDR (XLI) rising pretty decisively above a falling four-month trendline. The XLI is also trading above its mid-April peak. One of its biggest gainers is Boeing (BA). Chart 2 shows that stock gapping more than 3% higher today to the highest level in three months. Chart 3 shows Caterpillar (CAT) gapping higher as well. They're also giving a lift to the Dow Industrials.
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Chart 1
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Chart 2
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Chart 3
THE DOW INDUSTRIALS ARE ALSO BREAKING OUT ... With the industrial sector leading the market higher, it's no surprise to see the Dow Industrials having the days biggest percentage gain. And it too is breaking out to the upside. Chart 4 shows the Dow Industrials trading today at the highest level in two months. There again, Boeing and Caterpillar are two of its biggest gainers. Because of its high price, Boeing is having the biggest impact on the price-weighted Dow Average. General Electric and 3M are also two of its biggest percentage gainers. So is Intel (INTC). Chart 5 shows that semiconductor bellwether near a new record. Semiconductor stocks are leading the technology sector higher today. Tech is the day's second strongest sector.
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Chart 4
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Chart 5
THE DOW TRANSPORTS ARE ALSO BREAKING OUT... The Dow Industrials aren't the only Dow Average breaking out today. Chart 6 shows the Dow Jones Transportation Average trading at the highest level in nearly four months. That's good news to Dow Theorists. Upside breakouts by both the Dow Industrials and Transports constitute a Dow Theory buy signal in the making.
