Dow Jones Industrial Average Primed For Breakout On Weekly Chart

There hasn't been a whole lot of change on the daily time frame across indices. The Dow Jones Industrial Average ($INDU/$DJIA/$DIA) has been indicating a possible breakout on the daily time frame, but it's now looking so on the weekly time frame; this week is as good as any to see this happen. There was a fresh 'buy' trigger for On-Balance-Volume on this time frame to go with a recent 'buy' trigger in the MACD. Higher volume accumulation is a bonus.

I would be expecting the Dow Industrial Average to follow the lead of the S&P which has already cleared the early 2025 high after having broken out earlier this summer. Technicals for this index are net positive, including a relative outperformance to its peers.

Bitcoin is pointing a little in the other direction. It managed a clear breakout on the weekly timeframe five weeks ago, but it has failed to push on and is now looking vulnerable to a reversal. Technicals are net positive, although trading volume has dropped off dramatically since the latter part of 2024.

While Bitcoin has struggled a little on the weekly timeframe, the Nasdaq has been moving consistently higher on net bullish technicals. The index has also been outperforming peer indices on the weekly timeframe. I would be looking to Bitcoin to benefit from the gains in this index.

The Russell 2000 ($IWM) remains the laggard on the weekly timeframe. However, it does now enjoy a net bullish technical picture.

Finally, the Semiconductor Index ($SOX) managed to poke its head above breakout resistance, but finished the week below it. Second time lucky for this index?

For this week, I would probably stick with the Dow Industrial Average. The Semiconductor Index might provide a solid alternative, and if it does, then Bitcoin could be the ancillary benefit.

More content here

---

Follow Me on Twitter


Investments are held in a pension fund on a buy-and-hold strategy.

Popular posts from this blog

Upcoming "Death Cross" for Russell 2000 ($IWM)

Image
There was some modest buying today from the open, but volume was light and markets are below trading range support established during the latter part of 2024. It's hard to see where the buyers are going to come from given the chaos of Trump. I should add, I listened to Josh Brown's The Compound podcast and he showed an interesting chart of market returns in April-May in the year following a strong return in markets; in essence, selling to pay capital gains tax. Given the precarious nature of markets, and the possibility for this seasonal factor to play out, it's likely we have a couple more months of downward action before value buyers return. If we look at individual markets, the Russell 2000 ($IWM) is looking like the first to signal a long term shift in favor of bears with an upcoming "Death Cross" between the 50-day MA and 200-day MA - perhaps completing before the end of the week. Technicals are net bearish and the volume trend has collapsed since the st...
Read more

"Dead Cat" Bounce or Something Better?

Image
It's still a little too early to say, but the bounce is in play and "long" is the place to be. There is a huge amount of overhead resistance and the risk:reward remains tight with moves back to Thursday's lows well within expectations. For the S&P, I would be looking for a rally back to test the 200-day MA, or a fast-falling 20-day MA, whichever is the lowest. Real supply won't kick in until 5,700 is tested, and maybe it will have the juice to get to 5,775 before volume selling makes its presence felt. As the index makes this move I expect to see a decent On-Balance-Volume 'buy' signal, alongside what will be a weak MACD 'buy'; other technicals are likely to remain bearish.
Read more

Archive

Show more