Stock market breadth improved for Dow Jones

Global Stock Market Today

The global stock futures are erasing some of their losses from last week. Investors aren't that worried about valuations, and they believe that the current retracement in the stock market is more of a healthy correction, which was badly needed. Speculators are back in the market and they are trying their best to bag some bargains.

Geopolitical tensions are likely to rise as the Trump administration is looking at the possibility of banning the import of cotton products from China, which is likely to have a massive influence on the world's largest clothing companies.

Stocks in Asia closed on a positive note today. The Shanghai index soared 0.82%. The HSI stock index also moved higher by 0.40%, while the Korean Kospi advanced 0.59%. The Japanese Nikkei Index advanced by 0.69%.

Dow Index and SP500 Index: Market Breadth

The U.S. stock market's breadth confirmed a lot more improvement on the last trading day. 73% of the Dow Jones stocks traded above their 200-day moving average yesterday. This is a change of +10% from a day earlier.

The S&P 500 stock breadth failed to show similar optimism on Friday. 61% of the shares traded above their 200-day moving average yesterday. This represents a change of -2% from a day earlier.

Dow Jones and SP 500 Futures Today

The Dow Jones futures are trading higher by 300 points. The worst tech rout that we experienced last week may be over for the U.S. stock market.

Once again, the Dow Jones futures are moving towards their all-time high. The recent correction for the Dow Jones pushed the price close to its 50-day SMA, which was an opportunity to get back in the trade. Today's price action shows that the Dow's price has already made a higher high and it is outside the range of last week. Moreover, the Dow's price is trading above the 100 and 200-day SMA on a daily time frame, which is a further confirmation that the bulls are in control of the price.

The S&P 500 futures, the wider representation of the U.S. equity market, has bounced off of its 50-day SMA on the daily time frame. This confirms that there is sufficient buying pressure and bulls are ready to push the S&P 500 price higher. The weekly time frame confirms that the price is still trading between the highs and lows of last week. Having said that, the momentum is more to the upside as the price is trading well away from its last week's low and marching towards the highs of last week.

Stock Market Rally

The S&P 500 stock index closed in negative territory on the final trading day of last week. It fell by 0.81%. The communication sector led the index higher, and eight out of eleven sectors closed higher.

Unum stock contributed the biggest gain, soaring 8.21%. PayPal stock was the largest drag; it fell by 6.41%. The S&P 500 stock index is up 11% during this quarter.

The Dow index fell 159 points on Friday, and the Dow stocks moved the index lower by 0.56%. Eleven stocks of the Dow Jones Index increased in value, and 19 shares of the Dow index moved lower. Goldman Sachs stock advanced higher by 2.37% and was the biggest mover for the Dow, while Salesforce stock dropped 3.89%, the biggest drag for Dow Jones Industrial Average index.

The NASDAQ composite, a tech-savvy index, fell 1.27% on Friday.