Stock market breadth: Dow loses momentum

Stock Market Today

Investors are hopeful again about the U.S. stimulus package as House Speaker Nancy Pelosi said that she would open the stimulus conversation again. However, it is highly unlikely that we will see another stimulus package before the U.S. elections, given the Democrats and Republicans' track record.

Over in Europe, we have seen some life being breathed back into car sales. The number released today was better than the expectation. However, investors are primarily worried about a regional lockdown. The threat of a national lockdown remains real as well. If a national lockdown does occur in Europe and the U.K., it will destroy many businesses.

The Asian stock market closed the week in negative territory. The Shanghai index declined 0.07%. The Korean Kospi stock index also moved lower by 0.66%, while the Nikkei index declined 0.41%. The Australian ASX 200 fell 0.54%.

Dow Jones and SP 500: Market Breadth

The Dow Jones' market breadth continued to lose momentum yesterday. 70% of the Dow Jones stocks traded above their 200-day moving average.

The S&P 500 stock breadth also lost some steam yesterday. 71% of the shares traded above their 200-day moving average. This is a change of -2% from a day earlier.

Dow Jones Futures Today

The Dow Jones futures are trading lower by 53 points. Yesterday, the U.S. Unemployment Claims data confirmed that the U.S. labour market had taken a U-turn again, and more Americans are filing for jobless claims. This shows that the U.S economy is in desperate need of another stimulus package; however, the lawmakers aren't moving forward.

In terms of economic data today, it is all about the U.S. Consumer Sentiment data. The anticipation is to see a minor weakness in this number; however, it is possible that we may actually see a huge downward shift. If the Consumer Sentiment data misses the forecast by a small margin, it is unlikely to have a massive influence on the markets.

The Dow Jones futures have started to move higher, well above the 50-day SMA on the daily time frame. Yesterday's candle indicates that there is still huge buying pressure, and bargain hunters are still very active in the market. As long as the price continues to trade above the 50, 100 and 200-day SMA on the daily time frame, the bulls will remain in control of the price.

The S&P 500 index, which represents the broader stock market, also shows the same price action as the Dow Jones. The S&P 500 is still trading above the 50, 100, and 200-day SMA on the daily time frame, which confirms traders are still favouring risk-on trade. As for the weekly chart, it appears that we may close the week in positive territory. The near-term support is at 3398, and the resistance is at 3548.

Stock Market Rally

The S&P 500 stock index also recovered some of its loses yesterday, however the index declined by 0.15%. The heathcare sector led the index lower, and 4 sectors out of 11 closed lower.

The Dow index moved off its lows yesterday but closed in negative territory; the Dow stocks moved the index lower by 0.07%. 14 shares of the Dow fell, and 16 shares closed higher.

The NASDAQ composite, a tech-savvy index, moved lower by 0.47% yesterday.

SP 500 Leaders and Laggards: Apache and Vertex

Apache stock contributed the biggest gain, soaring 6.09%. Vertex stock was the largest drag; it fell by 19.4%. The S&P 500 stock index is up 8.2% so far this year.

Dow Jones Leaders and Laggards: UnitedHealth and Salesforce

UnitedHealth stock advance higher by 1.47% and was the biggest mover for the Dow, while Salesforc estock declined 1.88%, the biggest drag for Dow Jones Industrial Average index.