Markets were lower with the two of the Dow’s triple digit components, IBM and UTX, accounting for well more than half of the indexes loss of %. Keep in mind it is a price weighted benchmark meaning higher priced stocks will have a stronger impact. The S&P 500 and Nasdaq lost .4 and .2% respectively. It is a good example of why we demand CLOSING prices above triggers as the S&P 500 was above the 2130 double bottom pivot intraday on Monday but was unable to finish above it. If one wants to look at the glass half full scenario today a second consecutive rail play earnings report was viewed in a positive light. Last Friday KSU rose 6.5% (it rose today on a tough tape as well) and today CNI “chugged” higher by 2.3% (peer CP was unable to distribute the “goods” Tuesday after earnings falling 5.2%). Both stocks recaptured heavily slanting 50 day SMAs to the downside in the process. JBHT, a trucking play that delivered earnings as well last week gained ground Tuesday trying not to jackknife below its 200 day SMA. UNP posts numbers Thursday and it has carved out the same pattern as KSU and CNI as it rests just below its slanted 50 day SMA. It may be a good idea to watch WAB, a best in breed rail equipment play, as it gets set to report earnings Thursday. If the big players are acting well it should filter into what they have to say on the call.
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