Dow Jones Bounces Off Precise Round 25000 Number:
Of course there are more than industrial names in the Dow, but it is still referred to as the Dow Jones “Industrial” Average. It recorded a bullish hammer candle off the 200 day SMA as well. Getting more specific the XLI was the best performer Thursday, although it still fell .7% (the defensive in nature sectors were the best actors today as utilities, real estate and staples were your best actors). More concerning are the candles the IYT has recorded the last 3 sessions, with a doji candle Tuesday and then consecutive spinning tops, after a 15.8% move from the 12/24/18 lows. Not a jet setting percentage gain at all, pun intended.
(Deer)e Leapfrogs CAT:
Two of the biggest industrial names are traveling in different directions. John Deere is clearly outshining Caterpillar as it trades just 8% off its own most recent 52 week highs (CAT sits in bear market mode down 22% from its own most recent 52 week highs). CAT has been in a secular decline since recording a WEEKLY bearish hanging man candle a year ago the week ending 1/19/18. One can make the case it is within a symmetrical triangle and could find support at the bottom upward slanting line near 125. Stick with strength as DE is well above both its 50 and 200 day SMAs, and on the weekly chart has the look now of a one year long cup with handle trigger with a potential add on trigger of 166.29.
On days like Thursday it often pays to look for names that shrugged off the weak tape. They can be tells going forward to when the market readies itself for a move higher. A good example of this may be in the chart below of PCAR and how it was profiled in our 1/30 Industrial Report. Let us be clear the entry was missed by .13, but today it was actually higher by .5%. It continues to show good action POST breakout, and we know the best breakout tend to work right away. This name should be put on everyones watchlist.