Rise of the Industrials

The broad stock market has been making new all-time highs recently. Recovering from the pullback at the end of January this year and then advancing even higher. The Nasdaq 100 was the first index to do so. Then the Russell 2000 and followed by the S&P 500. But not all is roses in the US markets. One index has so far refused to make a new all-time high, the Dow Jones Industrials.

A closer look at the broader Industrial ETF ($XLI) shows some positive price action happening under the surface though. The chart below shows the run up to a peak in January and then a quick and brutal dash lower to the 100 day SMA over the next week. Since then it has not done much of anything. Settling into a range in March between 71 and 77.

But it turns out the last bottom, at the end of June, was different. After a push back to the top of the range at 77, the price pulled back again into August. But this time it found support at the confluence of the SMA’s and bounced. As it made its way back to the top of the range it sliced through. And it has kept moving higher.

Yesterday it closed at a 6 month high and about 3% off of the all-time high. Momentum continues to build as it moves higher. The RSI is in the bullish zone and rising. And the MACD is slowly drifting up in the bullish zone. The scenario shapes up for a test of the all-time high eventually. Keep a watch on this space.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.