Stock Indices: Dow Jones surges to highs unseen in almost two months

On Monday Dow Jones Industrial Average traded within the range of 17,064.58-17,139.21. The benchmark closed at 17,131.86, adding 0.28% (47.37 points) on a daily basis and marking its seventh trading day of gains in a row. The daily high has been the highest level since August 20th, when the average went as high as 17,345.32. In weekly terms, DJIA advanced 3.72% last week, while extending the gain from the week ended on October 4th. The weekly advance has been the most notable one since the week ended on February 8th, when DJIA soared 3.84%.

Among the companies included in the benchmark, 12 posted a daily decline on Monday and 18 posted a daily gain. Shares of Caterpillar Inc (CAT) plunged the most yesterday, going down 1.12% to close at USD 70.50, while extending losses from Friday. The daily rate of decrease has been the sharpest one since October 1st, when Caterpillar lost 1.48%.

At the same time, the shares of UnitedHealth Group Incorporated (UNH) registered the most notable daily increase within the DJIA, going up 2.72%, to close at USD 122.51. It extended the 2.75% gain, posted on Friday. The latter has been the steepest daily rate of increase since September 8th, when the stock surged 3.32%.

A number of large banks are to report earnings later this week, including JPMorgan (JPM), Goldman Sachs (GS), Wells Fargo (WFC) and Bank of America (BAC). General Electric (GE) is to post its earnings report during the week as well.

Goldman Sachs Group Inc (GS) appreciated 0.61% on Monday to close at USD 180.28, following two successive trading days of losses, while JPMorgan Chase & Co (JPM) slid 0.37% for the day to close at USD 61.70, falling a second straight day.

General Electric Company (GE) added 0.07% on Monday to close at USD 28.09. It has been the seventh trading day of gains in a row.

On a weekly basis, 27 shares posted gains, while 3 (Caterpillar, Goldman Sachs and JPMorgan) posted a slump last week.

Correlation with other indices

Taking into consideration the daily closing levels of the major stock indices examined and the period October 5th-October 9th, we come to the following conclusions in regard to the strength of relationship:

DJIA to Bovespa (0.9538, or very strong)
DJIA to S&P/TSX 60 (0.9491, or very strong)
DJIA to FTSE 100 (0.9440, or very strong)
DJIA to RTSI (0.9382, or very strong)
DJIA to DAX (0.9172, or very strong)
DJIA to CAC 40 (0.8547, or very strong)
DJIA to Hang Seng (0.8271, or very strong)
DJIA to Euro Stoxx 50 (0.8006, or very strong)
DJIA to Nikkei 225 (0.6289, or strong)

During the past week, Dow Jones Industrial Average tended to have moved almost equally in one and the same direction with 8 major indices. The strength of such a relationship was the most pronounced between DJIA and the Brazilian Bovespa and the least pronounced between DJIA and Euro Stoxx 50.

Additionally, DJIA tended to have moved strongly in one and the same direction with the Japanese Nikkei 225 during the period in question.

Daily and Weekly Pivot Levels

By employing the Camarilla calculation method, the Tuesday pivot levels for DJIA are presented as follows:

R1 – 17,138.70
R2 – 17,145.54
R3 (range resistance) – 17,152.38
R4 (range breakout) – 17,172.91

S1 – 17,125.02
S2 – 17,118.18
S3 (range support) – 17,111.34
S4 (range breakout) – 17,090.81

By using the traditional method of calculation, the weekly pivot levels for DJIA are presented as follows:

Central Pivot Point – 16,899.16
R1 – 17,296.21
R2 – 17,507.94
R3 – 17,904.99

S1 – 16,687.43
S2 – 16,290.38
S3 – 16,078.65