DJIA Opens North Of 27,300

Posted Monday, July 15, 2019 by
Shain Vernier • 1 min read

The Monday opening bell has rung out on Wall Street, resuming the trade of U.S. equities. Through the first half hour of action, the DJIA DOW (-10), S&P 500 SPX (-1), and NASDAQ (+3) are trading near flat. With no market driving economic events scheduled for today, traders will get a bit of rest coming off last week’s FED-dominated news cycle.

Earlier, the NY Empire State Manufacturing Index (July) came in extremely positive on a month-over-month basis. The figure measured 4.3, above estimates (2.0), and the previous release (-8.6). While only a peripheral metric, this is a study conducted by the Federal Reserve Bank of New York. If nothing else, this report may fuel debate over future U.S. growth prospects ahead of the 31 July meeting.

The DJIA Is In Rarefied Air

Valuations are lofty in the Dow Jones Industrial Average (DJIA), with the index opening the week above 27,300. The September E-mini DOW has followed suit, posting new all-time highs earlier today.

September E-mini DOW Futures (YM), Daily Chart DJIA
September E-mini DOW Futures (YM), Daily Chart

Here are the levels to watch for the remainder of the U.S. session:

  • Resistance(1): Psyche Level, 27500
  • Support(1): Bollinger MP, 26662
  • Support(2): Daily SMA, 26610

Bottom Line: At some point, the recent strength in U.S. equities and the DJIA will take a pause. This week brings earnings reports for many Wall Street heavy hitters ― lagging numbers from the likes of Goldman Sachs, JP Morgan, IBM, and Microsoft are capable of stifling the DOW’s recent rally should they come to pass.

Until elected, I will have sell orders in the September E-mini DOW from 27471. With an initial stop at 27511, this trade produces 40 ticks on a standard 1:1 risk vs reward management plan.

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