US stock futures up but massive shift in stock breadth

Global Stock Market Today

The global stock market is having a mixed session today. The U.S. stock market recorded one its best August's in nearly 34 years and investors are trying to digest this news.

The dollar index has extended its losses and this has provided fuel for currencies like the Euro, Sterling and the Japanese Yen.

The U.K. government has stopped its support for restaurants today. Now the real test will begin for the U.K's consumer spending. This withdrawal of support comes at a time when the government is also going to end its furlough scheme in two months. This means that the unemployment rate will soar and it makes no sense for Sterling to trade at 1.34 against the dollar.

Stocks in Asia closed mostly in negative territory. The Shanghai index declined 0.08%. The ASX stock index also moved lower by 1.77%, while the Korean Kospi soared 1.06%. The Japanese Nikkei Index fell 0.01%.

 

Dow Index and SP500 Index: Market Breadth

The U.S. stock market's breadth has confirmed a dramatic downturn in terms of bull strength. 53% of the Dow Jones stocks traded above their 200-day moving average yesterday.

The S&P 500 stock breadth also confirmed weakness yesterday. 61% of the shares traded above their 200-day moving average yesterday.

 

Dow Jones and SP 500 Futures Today

The Dow Jones futures are trading lower by 69 points. The main event for the day is the upcoming U.S. ISM manufacturing number. The forecast is for 54.6, while the previous reading was at 54.2. This number will give us the first clue for the upcoming US NFP data due on Friday.

The Dow Jones futures have retraced from their all-time high yesterday. The sell-off on a daily time frame confirms that it has wiped off the gains for the last two days. However, this doesn't mean that the bull trend is under any threat at all. The price is still trading above the 50, 100 and 200-day SMA on a daily time frame. As long as the Dow Jones price stays above these averages, the chances are that the bull trend will continue.

The S&P 500 futures, the broader representation of the U.S. equity market, is still trading above the upward trend line while the price remains in the overbought territory as per the RSI on a daily time frame. The S&P 500's 100-day SMA is trading above the 200-day SMA, which confirms that the bulls are in control of the price. In addition to this, we also have the S&P 500 index trading above all the major moving averages, which are 50, 100 and 200-day SMA.

 

Stock Market Rally

The S&P 500 stock index fell by 0.22% yesterday. The energy sector led the index higher, and seven sectors out of all eleven closed higher.

Alexion stock contributed the largest gain, advancing 6%. HollyFrontier stock was the largest drag; it declined by 7.52%. The S&P 500 stock index increased by 13 per cent during this quarter.

The Dow Index plunged by 223 points yesterday, and the Dow stocks moved the index lower by 0.78%. Seven stocks of the Dow Jones Index increased in value, and 23 shares of the Dow Index moved lower. Apple stock advanced higher by 3.39% and was the biggest mover for the Dow, while Boeing stock dropped 2.26%. This was the biggest drag for the Dow Jones Industrial Average index.

The NASDAQ composite, a tech-savvy index, gained 0.96% yesterday.