After the first ‘perfect’ week for the DJIA since May 2018, a slew of mergers and the deal with Mexico are helping to kick off the week on a positive note providing a nice encore to last week’s gains. In terms of economic data, the week is starting off slow but will progressively pick up as the week goes on.
Please read today’s Morning Lineup for our latest take on events from the weekend, overnight, and this morning.
Sectors have seen quite a move within their trading ranges over the last week. As shown in the chart below, at this time a week ago the S&P 500 and every sector were trading below their 50-day moving averages and most were oversold. Fast forward five days and there are now just three sectors below their 50-DMA, and Energy is the only sector that is oversold. Meanwhile, both Consumer Staples and Utilities have moved back into ‘extreme’ overbought territory.
As far as the major averages are concerned, while the S&P 500 is trading back above its 50 and 200-DMAs, the Nasdaq 100 is still below its 50-DMA, and the Russell 2000 isn’t above either of those thresholds. If the rally is going to keep on going, they have a lot of catching up to do.
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