In the past 3 days, S&P500 has been trading at all-time high after it surpassed the high recorded in late July this year. Despite breaking to a new high, S&P500 seems to be reluctant to go higher. DJIA and Nasdaq have yet to surpass their respective July highs. Until DJIA and Nasdaq have joined in this breakout party, I think we should be cautious and not be overly bullish.
Chart 1: S&P500's daily chart as at Oct 30, 2019 (Stockcharts.com)
Chart 2: DJIA's daily chart as at Oct 30, 2019 (Stockcharts.com)
Chart 3: Nasdaq's daily chart as at Oct 30, 2019 (Stockcharts.com)
Looking at the 3-year chart for S&P500, DJIA and Nasdaq, we can see that none of these indices have surpassed the line connecting their recent high. The appearance of bearish divergence in the MACD indicators for all the charts could be a warning of the internal weakness of the indices.
Chart 4: DJIA's daily chart as at Oct 30, 2019 (Stockcharts.com)
Chart 5: S&P500's daily chart as at Oct 30, 2019 (Stockcharts.com)
Chart 6: Nasdaq's daily chart as at Oct 30, 2019 (Stockcharts.com)
I am not bullish about the US markets. Yesterday, Fed's decision to cut interest rate could be taken as a sign of weakness in the US economy. As the action of the Fed contradicts the trend of the main stock market barometers, such as DJIA, S&P500 and Nasdaq, we should take a cautious stance, especially since the stock markets have rallied almost 200% from its low in 2009.
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