Stock Market Breadth Favors Bulls

The global stock futures have eased off from their highs. The dollar index is off its lows, and this is not such good news for other currencies. All eyes are on the U.S. Initial Jobless Claims data, which is expected to fall under one million. If the number beats the forecast, it will strengthen the dollar index, and this means the sterling-dollar pair can continue its slide towards 1.31 or even lower. For the euro-dollar index, the downward move could extend below 1.18.

Stocks in Asia posted a mixed session today. The Shanghai index declined by 0.54%. The HSI stock index also moved lower by 0.60% while the Korean Kospi advanced 1.30%. The Japanese Nikkei Index advanced by 0.94%. 

Geopolitics 

The U.K. is standing with Germany on the issue of the poisoning of Alexei Navalny. Johnson wants to display solidarity against Russia, and the hope is that it may soften the deadlock in the Brexit negotiations.

Dow Index and S&P500 Index: Market Breadth

The U.S. stock market's breadth continues to show more bull strength.  63% of the Dow Jones stocks traded above their 200-day moving average yesterday. This is a change of +5% from a day earlier,  

The S&P 500 stock breadth also gained more fuel yesterday. 64% of the shares traded above their 200-day moving average yesterday. This represents a change of +3% from a day earlier,  

Dow Jones and S&P 500 Futures Today

The Dow Jones futures are trading lower by 43 points. This comes despite the fact that there is a lot of optimism about a potential coronavirus vaccine, which could be here before November. The CDC in the U.S. has informed states that they need to be ready for a potential vaccine by November 1^st. 

The Dow Jones futures are less than one percent away from their all-time high, which was formed before the Covid-19 crash. The price action is taking a little breather, but the momentum looks strong as the 100-day simple moving average is trading above the 200-day SMA. The Dow’s price is also above the 50-day SMA and as long as the price stays above all three averages, the bulls are likely to remain in control of this price action. 

The S&P 500 futures, the broader image of the U.S. equity market, confirmed that yesterday's price action was fully ruled by the bulls. The psychological support for the S&P 500 is at 3,500, and currently, it is trading at 3,570. There is a concern that the S&P 500 may face some retracement, as the price is more than 3% away from its 50-day SMA. Having said that, the bull trend is unlikely to be threatened as long as the price is above the 50, 100 and 200-day SMA on a daily time frame.

Stock Market Rally 

The S&P 500 stock index made another record high yesterday and went up by 1.54% . The communication sector led the index higher, and six sectors out of all eleven closed higher. 

DXC Technology stock contributed the biggest gain, soaring 11.6%. Diamondback stock was the largest drag; it fell by 5.61%. The S&P 500 stock index’s is up 16% during this quarter.

The Dow index soared by 454 points yesterday, and the Dow stocks moved the index higher by 1.59%. 28 stocks of the Dow Jones Index increased in value, and 2 shares of the Dow index moved lower. United Health stock advanced higher by 2.37% and was the biggest mover for the Dow, while Salesforce stock dropped 1.62%, the biggest drag for Dow Jones industrial average index.  

The NASDAQ composite, a tech-savvy index, gained 1.04% yesterday.