Stock Indices: Dow Jones reaches highs unseen since August

On Wednesday Dow Jones Industrial Average traded within the range of 17,168.61-17,314.99. The benchmark closed at 17,168.61, falling 0.28% (48.50 points) on a daily basis, while extending the loss from Tuesday. 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 0.77% last week, while marking its third consecutive week of gains. The weekly advance, however, has been the most modest one since the week ended on August 16th, when DJIA added 0.60%. For the current month, Dow is up 5.43%.

Among the companies included in the benchmark, 18 posted a daily decline on Wednesday and 12 posted a daily gain. Shares of Goldman Sachs Group Inc (GS) plummeted the most yesterday, going down 3.13% to close at USD 179.70, while extending losses from Tuesday. The daily rate of decrease has been the sharpest one since September 28th, when Goldman Sachs lost 3.79%.

At the same time, the shares of United Technologies Corporation (UTX) registered the most notable daily increase within the DJIA, going up 2.46%, to close at USD 97.97. It extended the 3.88% gain, posted on Tuesday. The latter has been the steepest daily rate of increase since June 29th 2012, when the stock surged 4.04%.

On a weekly basis, 18 shares posted gains, while 12 posted a slump last week.

In case the blue-chip gauge continues its advance, the high from August 20th will be a possible level of resistance. If broken, Dow may even attempt to test the area 17,450.00-17,550.00, where on several occasions in the past it encountered resistance.

Correlation with other indices

Taking into consideration the daily closing levels of the major stock indices examined and the period October 12th-October 16th, we come to the following conclusions in regard to the strength of relationship:

DJIA to Euro Stoxx 50 (0.9792, or very strong)
DJIA to CAC 40 (0.9573, or very strong)
DJIA to FTSE 100 (0.9448, or very strong)
DJIA to DAX (0.9349, or very strong)
DJIA to Hang Seng (0.9325, or very strong)
DJIA to RTSI (0.9232, or very strong)
DJIA to KOSPI (0.8908, or very strong)
DJIA to Nikkei 225 (0.8663, or very strong)
DJIA to Bovespa (0.3483, or moderate)

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 Euro Stoxx 50 and the least pronounced between DJIA and the Japanese Nikkei 225.

Additionally, DJIA tended to have moved to a moderate extent in one and the same direction with the Brazilian Bovespa during the period in question.

Daily and Weekly Pivot Levels

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

R1 – 17,182.03
R2 – 17,195.45
R3 (range resistance) – 17,208.86
R4 (range breakout) – 17,249.12

S1 – 17,155.19
S2 – 17,141.77
S3 (range support) – 17,128.36
S4 (range breakout) – 17,088.10

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

Central Pivot Point – 17,107.89
R1 – 17,328.10
R2 – 17,440.24
R3 – 17,660.45

S1 – 16,995.75
S2 – 16,775.54
S3 – 16,663.40