DOJ Targets Google, DOW Rallies Toward 28,500

Posted Tuesday, October 20, 2020 by
Shain Vernier • 1 min read

Earlier this morning, the U.S. Department of Justice (DOJ) filed an antitrust suit against tech giant Google. According to the Justice Department, “Google is a monopolist in general search services, search advertising, and general search advertising markets.” Following a 16-month investigation, Deputy Attorney General Jeff Rosen charged Google with violating the U.S. Sherman Act. Despite the DOJ’s action, parent company Alphabet’s stock price (GOOG) has rallied by more than 1% on the session. 

In other news, the bounceback for the American retail sector continues. The October 16 Redbook Index came in strong on a monthly (+1.0%) and yearly basis (+2.5%). Each of these figures more than doubled the previous release.

At the halfway point of the Wall Street session, U.S. stocks are ignoring the DOJ’s action and are on the bull. The DJIA DOW (+261), S&P 500 SPX (+35), and NASDAQ (+98) are all up nearly 1% on the day. For the time being, news of the COVID-19 recovery and stimulus optimism are fostering positive sentiment.

DOJ Targets Google, DOW Futures Rally

With about three hours left in the U.S. trading day, December E-mini DOW futures are threatening to close definitively in the green. Prices remain in bullish territory, with All-Time Highs (29,180) in view.

December E-mini DOW Futures (YM), Daily Chart

Here are the levels to watch in this market as we roll toward midweek trade:

  • Resistance(1): All-Time High, 29,180
  • Support(1): Bollinger MP, 28,018 
  • Support(2): 38% Macro Wave Retracement, 27,914

Bottom Line: Right now, stimulus hopes are trumping DOJ fears. If we see a stimulus deal reached in the coming hours, then the December DOW will likely run at the All-Time High. If so, a shorting opportunity may come to pass.

Until elected, I’ll have sell orders in the queue from 29,174. With an initial stop loss at 29,256, this trade produces 70 ticks on a slightly sub-1:1 risk vs reward management plan.

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