DJI analysis.

[viktor_k67]

We may analyze the DJI index price, build on it different theories, but the reality is that DJI has 30 stocks and the DJI index's price is calculated from the price of these stocks. The DJI will go where these stocks' price go.

As of today, 9 of the 30 DJI stocks are trading in the 15% range from their 52-week highs and only 4 of 30 stocks are traded in the 15%-range from their 52-week lows see the chart #1 below.

Chart #1: 5% High-Low Range DJI chart

19 of the DJI stocks are traded closer to their 52-week highs and 11ocks are trading closer to their 52-week lows. Overall we may assume that sentiment on the DJI index is more bullish than bearish. Maybe not strongly bullish (only 19 versus 11 stocks), but bullish.

By putting the 30 of the DJI stocks in the Win/Loss order (see the table #1 below), we will see the neutral picture - 15 stocks over past 52-week (1 year) period have moved up and 15 stocks dropped down. From this prospective we may clearly say the situation on the DJI sector neither bullish nor bearish,

Table #1: DJI stocks sorted by 1-year return

Symbol. 1-year Win / Loss
1 NKE 36.32 %
2 DIS 35.26 %
3 HD 33.47 %
4 V 27.50 %
5 MCD 17.87 %
6 UNH 16.68 %
7 GE 14.19 %
8 BA 13.43 %
9 JPM 12.34 %
10 TRV 11.97 %
11 MSFT 11.27 %
12 PFE 5.72 %
13 CSCO 2.83 %
14 AAPL 2.57 %
15 GS 1.02 %
16 MMM -0.21 %
17 INTC -3.59 %
18 KO -4.11 %
19 JNJ -5.28 %
20 DD -6.64 %
21 MRK -8.88 %
22 VZ -9.56 %
23 UTX -9.72 %
24 IBM -13.76 %
25 PG -14.31 %
26 XOM -16.76 %
27 AXP -20.08 %
28 CVX -24.10 %
29 WMT -28.98 %
30 CAT -30.30 %

Now, I would like to take deeper look and check all 30 stocks on hourly charts to see the overall sentiment on each of DOW stocks. I am selecting hourly chart because i do not want to know where should I expect to see DJI index in a couple of months, but rather what should I expect in the coming weeks. After fast evaluation, if a stock show higher odds of moving up I will assign to it +1 and if a stock show higher odds of moving down I will assign to it +1. In this way, at the end we will have summary DJI sentiment.

1. NIKE: -1

Last trading session strong advance cause by announcement of the back shares purchase was on strong volume. Last time similarly strong bullish volume was seen on Nov 16-17, 2015 and NIKE stock went side-way after that. I would expect to have something similar. See my understanding of volume surges and how they could affect a price trend at
http://www.marketvolume.com/advance_decline/overbought_oversold.asp

2. DISNEY: +1

This stock has strong bullish momentum, it is difficult to expect anything bearish here in the near future

3. HOME DEPOT: +1

The same as with Disney stock, this stock has strong bullish momentum

4. VISA: +1

We do not have strong bullish momentum here, but this stock is in the stable bullish trend. At the same time by looking at the market reaction on November 3, 2015 (see high volume on price drop), we may say that as soon as this stocks drops it attracts number of strong investors who buys on high volume by pushing price back into bullish direction

5. MCDONALD'S: -1

We see strong bullish volume on October 23-24, 2015 and since then this stock moves basically side-way. I would say this stock could be quite sensitive to any bearish event.

Rest of the DJI stocks are coming in the next post.

 

[viktor_k67]

6. UNITEDHEALTH GROUP: + 1

This stock maybe could be considered Bearish in a longer-term, Yet, after strong bearish volume surge I would expect to see a bounce up.

7 GENERAL ELECTRIC: -1

Here we may see extremely strong increase in trading volume during side-way range trend. Usually we see such strong volume surges on strong movement either up or down. However, GE stock moves basically side-way. A lot od shares are changing hands here. If you take a look at the daily GE chart you will see that this volume surge s at the top of strong up-move and this is a bearish sign for me.

8. THE BOEING: +1

This stock broke its resistance level set at the end of October and it has some bullish momentum.

9. JP MORGAN CHASE: +1

This stock did not break its resistance level set on November 9, It show some weakness on Friday (Nov 19) and it has no abnormal volume activity. By looking at the daily chart (higher time frame) I would rather say that this is a neutral stock which reached the resistance corridor set in June-August of 2015 and it has higher odds to go side-way than either go up or go down. Still, I have to choose between +1 and -1, I would rather chose +1.

10. THE TRAVELERS COMPANIES: +1

The same as Disney and Home Deport this stock has strong bullish momentum.

11. MICROSOFT: -1

The situation here is quite similar to the McDonald's stock. After strong bullish volume surge on October 23-27 of 2015, this stock is moving side-way. I would say the same that this stock could be quite sensitive to any bearish event.

12. PFIZER: +1

Even a trend on PFE stock looks bearish, because of the strong bearish volume on November 18-19, I would consider this stock has good odds to bounce up. Strong volume surge could be a sign of hitting the support level.

13. CISCO SYSTEMS: +1

This is strongly bullish stock at this moment. It bounced up after strong bearish volume surge on November 13 and now it moves up.

14. APPLE: +1

Apple stock could be considered bullish, while I would say there is still good odds it may bounce down from the resistance set on November 3 of 2015

15. THE GOLDMAN SACHS GROUP: -1

Bullish trend-line has been broken on this stock for a week. While we do not see any abnormal volume activity which could push a stock into overbought or oversold condition, at this point of time, the GS stock looks weak.

After brief checking 15 of the 30 DJI stocks, the overall sentiment on my opinion is +15 versus -5 in the favor of the Bulls on the DJI index.

After short break I will post the rest 15 of DOW stocks.

 

[viktor_k67]

16. 3M: -1

Here we may see situation similar to McDonald and Microsoft stocks - after strong volume surge on October 22 of 2015 is in the side-way range trend with increase in volatility over the past couple of weeks which mean this stock could be vulnerable to bad news and to a drop down.

17. INTEL: -1

Strong Bullish volume surge on November 18 of 2015 could halt the current advance on this stock. We already saw some step back on the next day November 19.

18. THE COCA-COLA: -1

The situation on the KO stock could be described in similar way in similar way to the INTC stock - on November 18 of 2015, strong bullish volume surge made the number of bullish traders exhausted and already on the next day (November 19) we saw the Bulls were not able to hold the ground.

19. JOHNSON & JOHNSON: +1

The JNJ stocks is moving side-way at the resistance level set in November 2-11 of 2015. There is no abnormal volume marking end of up-move and by taking at the higher time-frame charts we may say that JNJ is in Bullish trend and has good odds of breaking up November's resistance line.

20. EI DU PONT DE NEMOURS: +1

We may see some slow down on the hourly (1 bar = 1 hour) DD stock chart, yet, when we take a look at higher time-frame (1 bar = 1 day), it becomes clear that this stock is in up-trend.

21. MERCK: +1

Not a strong stock at this moment. On the higher time-frame chart this stock still look like in a "lazy" recovery. I would not say the sentiment is strongly bullish on this stock. I would rather say it is on a break to become bearish, but so far, it is still bullish (lightly bullish).

22. VERIZON COMMUNICATIONS: -1

This stock still failed to recover from the correction (crash) at the end of August 2015. We already saw on October 30 of 2015 the bounce from the resistance set on August 28 - September 16 of 2015 and it does not look like VZ stock will break it now.

23. UNITED TECHNOLOGIES: +1

On October 20-23 of 2015 we may see the strong bullish volume which halted the UTX stock advance. On the other hand on November 13 of 2015 we had strong bearish volume, therefore, I would assume we may see resuming of the recovery from the September's correction. Actually for this stock it would be the recovery from February-August 2015 down-trend.

24. INTL BUSINESS MACHINE: -1

This stock may look like bullish on the hourly chart, however, the IBM stock is in a stable decline since August of 2014. So far, it does not look like (we have not seen any signs) it hit the bottom.

25. PROCTER & GAMBLE: -1

The PG stock could be considered in the side-way range trading. Strong bullish volume on October 22-27 of 2015 stopped the recovery and now it is slightly bearish.

26. EXXON MOBIL: -1

This stock has broke its longer-term bearish line (bearish trend from July 2014 until August 2015), however, there are some odds it may go back and retest its lows especially after bearish volume surge which halted the recovery on October 30 - November 3 of 2015

27. AMERICAN EXPRESS: -1

This stock is in strong bearish trend since December of 2014. Strong bearish volume surge in October 21-23 of 2015 halted the decline but only until November 9 of 2015. This bearish volume surge was not strong enough to break the Bearish longer-term trend. It is difficult to expect any decent bullish movements from the AXP stock at this moment.

28. CHEVRON: -1

The CVX stock is on the edge to break its August 2014 - September 2015 bearish trend. This stock had huge bearish volume in August-September of 2015 which could be a sign of long-term support. Still, bullish volume surge in November 2-3 of 2015 broke the recovery and now there are some odds we may see an attempt of retesting the August's lows.

29. WAL-MARTORES: -1

Since January 2015 this stock has been crashing down. So far, I see no signs of reaching a support. We may see a beginning of some panic selling (strong bearish volume surges), yet, it looks like the Bears ignore it and they continue to push this stock down. Strong bearish volume surge seen on October 2015 halted the decline only temporary and this is bad for WMT stock sign - it suggests that the Bears on this stock are very strong.

30. CATERPILLAR: -1

The same as WMT stock, the CAT stock in the strong and steady downtrend since August of 2015. Current bounce from the October 2015 support does not look like a bounce from the long-term trend. Since this stock bounced second time from the shorter-term support set in October 2015, we may see some positive trading, yet, it is very difficult to say that this is a bullish stock.

Charts and graphs are taken from http://www.marketvolume.com

 

[viktor_k67]

Overall sentiment among DOW stocks is 14 Bullish stocks versus 16 Bearish stocks. While my analysis could be considered subjective and other person may come to different numbers, my numbers do not go far away the number we see in the Table #1 in my first post. We have strongly bullish stocks and we have strongly bearish stocks and sentiment on the DJI index could be considered neutral.

At this moment, I would say the market is not as strong as it was in 2014 or in 2013 and etc. Even the DJI index is close to the resistance set on November 3-4 of 2015 and it is close to the highs set in the period from December 2014 until July 2015, there is the number of stocks holding the DJI index back. I believe we are entering the side-way range trading and DJI stocks' analysis confirms that - we have bullish stocks pushing index up and we have strongly bearish stocks pushing the index down. I do not think it will be such long side-way trend as we had from December 2014 until July 2015, yet I expect to see some "war" between the Bulls and the Bears and I believe we will shortly who is winning.

 

[Victor Newman]

I think if you would consider
Component Weights of Stocks in DJIA, it would be better.

 

[Cswim63]

Overall sentiment among DOW stocks is 14 Bullish stocks versus 16 Bearish stocks. While my analysis could be considered subjective and other person may come to different numbers, my numbers do not go far away the number we see in the Table #1 in my first post. We have strongly bullish stocks and we have strongly bearish stocks and sentiment on the DJI index could be considered neutral.

At this moment, I would say the market is not as strong as it was in 2014 or in 2013 and etc. Even the DJI index is close to the resistance set on November 3-4 of 2015 and it is close to the highs set in the period from December 2014 until July 2015, there is the number of stocks holding the DJI index back. I believe we are entering the side-way range trading and DJI stocks' analysis confirms that - we have bullish stocks pushing index up and we have strongly bearish stocks pushing the index down. I do not think it will be such long side-way trend as we had from December 2014 until July 2015, yet I expect to see some "war" between the Bulls and the Bears and I believe we will shortly who is winning.

OK what evidence, if any, do you have that the sideways move will be less than before? The tough part about these late bull market moves is that sometimes the really beat up stocks rally for no reason other than just being oversold--the fundamentals don't support it, and the leaders fall off as the economy deteriorates
I'd like to see a similar analysis of the transports. Nice work though and thanks--Swimr

 

[viktor_k67]

By using the refereed weighting it would be like:

Goldman Sachs -7.18
3M -5.96
Boeing 5.6
IBM -5.19
NIKE -4.97
Home Depot 4.88
Disney 4.5
Apple 4.47
Travelers 4.34
McDonalds -4.27
UnitedHealth Group 4.23
Johnson & Johnson 3.84
United Technologies 3.68
Chevron -3.34
Visa A 3.01
ExxonMobil -2.99
Procter & Gamble -2.84
American Express -2.71
Caterpillar -2.67
JPMorgan Chase 2.53
Dupont 2.5
Wal Mart -2.25
Microsoft -2.03
Merck 2.03
Verizon Communications -1.7
Coca-Cola -1.59
Intel -1.3
Pfizer 1.21
General Electric -1.15
Cisco Systems 1.03

Total: -4.29

 

[viktor_k67]

OK what evidence, if any, do you have that the sideways move will be less than before?

The major indexes were in side-way range trading for 7 months (from February until August). During this time many stocks made strong correction (crashed) and there was the number of advancing stocks. For 7 months weak stocks were trying to push indexes down while market giant (like aapl) were trying to push the indexes up. As the result the indexes were in side-way range. We have to options for exit:

1. whether bullish traders on giant stocks (like AAPL) become tired and market will crash - we saw in September that there are forces to push market down fast and strongly.

2. the weak stocks which are in recession drops to very low levels and starts to attract investors to buy and then the market will resume its bullish longer-term trend.

Just my personal opinion, no evidences, I do not think we need another 8 month for market to figure it out. I guess, the market need just a trigger which could be December's rate decision or yearly companies reports and etc.

 

[Cswim63]

The major indexes were in side-way range trading for 7 months (from February until August). During this time many stocks made strong correction (crashed) and there was the number of advancing stocks. For 7 months weak stocks were trying to push indexes down while market giant (like aapl) were trying to push the indexes up. As the result the indexes were in side-way range. We have to options for exit:

1. whether bullish traders on giant stocks (like AAPL) become tired and market will crash - we saw in September that there are forces to push market down fast and strongly.

2. the weak stocks which are in recession drops to very low levels and starts to attract investors to buy and then the market will resume its bullish longer-term trend.

Just my personal opinion, no evidences, I do not think we need another 8 month for market to figure it out. I guess, the market need just a trigger which could be December's rate decision or yearly companies reports and etc.

There's also a possibility of a broadening top where they take out the trendlines on either side of the range and then pull back into the range. Difficult to trade either way. Rather see a compression--some sort of a triangle. Take a look at Aussie dollar. Just broke out of a big triangle--hourly or daily can't remember

 

[Victor Newman]

I think to see similarities on weekly chart, you don't have to spend years in the markets.

2000, 2007 and now 2015 there were divergences between price and RSI. Also 55 - 20 weekly SMA works well, yes maybe 2015 it is not clear I mean we are higher than 55 WSMA but we couldn't break higher too.

So my view on US index futures is down. If ES will be available to see under weekly trend line which is on 1930 we can see 233 WSMA which is around 1688.

To stay side way there are a lot of pressure. Maybe you will need COT analysis to support idea and wait until next FED meeting to not gambling but weakness on weekly price pattern is a signal for future.