Stock market breadth improves; optimism about vaccine drives momentum
|Global Stock Market Today
The global stock market rally is roaring today, and the risk-on trade is the name of the game among stock traders. The momentum that we experienced in Asian markets had its spillover effects in European markets and the U.S. stock only build on that positive optimism. It seems like stock traders are ready to push the limits further today. Stocks in Asia traded mostly higher, with some exceptions. The Shanghai stock index declined by 0.38%. The HSI stock index fell by 0.62% while the Korean Kospi jumped higher by 0.24%. The Australian ASI index also advanced by 1.49%.
Dow Index And SP500 Index: Market Breadth
The U.S. stock market's breadth has experienced an improvement, and bulls have gained more ground. 60% of the Dow Jones stocks traded above their 200-day moving average yesterday.
The S&P 500 stock breadth also experienced positive momentum yesterday. 59% of the shares traded above their 200-day moving average yesterday.
Dow Jones And SP500 Futures Today
The Dow Jones futures are moving higher, and they are up by 141 points. Investors feel comfortable that the tensions between the U.S. and China have failed to derail the trade agreement between the two nations. Moreover, there is optimism about the coronavirus potential vaccine and treatment of Covid-19 patients. The FDA approved the possible treatment of coronavirus patients by using blood plasma, and Trump is determined to provide his support and fast track this remedy.
The Dow Jones futures are experiencing some serious momentum, and its price action confirms this. Dow Jones's weekly time frame confirms that the Dow price has trashed the highs of last week, and it is on its way to reaching the all-time high—a level that other U.S. indices already have reached. The all-time high for the Dow Jones is 29,540, and currently, the Dow Jones stock future index is trading at 28,381.
The bulls are also taking some comfort that the Dow Jones price is trading above all the 50, 100, and 200-day SMA moving averages. As long as the index remains above these averages, the chances are that the bulls are likely to remain in control of the price.
The S&P 500 futures, the wider representation of the U.S. equity market, is marching in a new territory. The S&P 500 futures are already above the highs of yesterday, and the S&P 500 index maintains its upward trend. The price is trading above all the important moving averages, which are 50, 100, and 200-day SMA.
The weekly time frame for the S&P 500 index is screaming for caution because the price has gone too far and too fast. The S&P 500 future index is trading more than 7% away from its 50-week moving average, and this means a correction can take place.
Stock Market Rally
The S&P 500 index recorded another positive session yesterday. The S&P 500 stock index gained 1.00%, the biggest move since August 12th. The energy sector pushed the S&P 500 index higher, and ten sectors out of all eleven closed higher.
American airline stock contributed the most gains, it jumped higher by 10.5%. Centene stock was the largest drag; it declined by 3.57%. The S&P 500 stock index's dividend yield is 1.76% on a trailing 12-month basis.
The Dow index soared by 378 points yesterday, and the Dow stock index advanced by 1.35%. 24 stocks of the Dow Jones Index increased in value, and6 shares of the Dow moved lower. Boeing stock advanced higher by 6.43% and was the biggest mover for the Dow, while United Heath stock dropped 1.69%, the biggest drag for Dow Jones industrial average index.
The NASDAQ composite, a tech-savvy index, gained 0.61% yesterday.
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