The Dow Jones Industrial Average is the first of the major average to close above its 200-day simple moving average at 24,985. The S&a;amp;P 500, Nasdaq, Dow Jones Transportation Average and Russell 2000 remain below their 200-day SMAs, which is one indicator that the rally since Christmas is a bear market rally not a new bull market.
The Dow 30 is above my semiannual pivot at 24,340, which can now be considered a value level. The S&a;amp;P popped above my semiannual pivot at 2,668.8 on the dovish Fed statement released on Wednesday. The Nasdaq tested my semiannual risky level at 7,274. Dow transports held its semiannual value level at 8,858 as 2019 began and now faces this month&a;rsquo;s risky level at 10,229. The Russell 2000 tested my semiannual risky level at 1,504.17 with a new monthly risky level at 1,509.34.
The weekly charts (not shown) still show that all five major averages ended last week above their five-week modified moving averages with 12x3x3 weekly slow stochastic readings rising above the oversold threshold of 20.00.
&l;strong&g;Today I show the daily charts with their key technical levels. &l;/strong&g;
&l;p class=&q;tweet_line&q;&g;The Federal Reserve continues to unwind its balance sheet: As of January 30, the balance sheet was marked at $4.040 trillion, down $460 billion since October 2017 when it was $4.5 trillion. The total to date for January is now up to $18 billion. The last day of January was a maturity date for U.S. Treasurys so I will assume that the release for February 6 will be for January, not February.
&l;strong&g;My call for the FOMC: &l;/strong&g;The Federal Reserve will likely keep the federal funds rate at 2.25% to 2.50% as their revised &a;ldquo;normal,&a;rdquo; but they want to eventually raise it to 2.75% to 3.00%. The Fed balance sheet has become a primary monetary policy tool as the unwinding continues, but longer-term they could increase the balance sheet without using quantitative easing measures.
&l;strong&g;The Scorecard For January 1, 2019&l;/strong&g;&l;strong&g;&a;nbsp;&l;/strong&g;
&l;img class=&q;size-full wp-image-59313&q; src=&q;http://blogs-images.forbes.com/investor/files/2019/02/Markets190201-1.jpg?width=960&q; alt=&q;&q; data-height=&q;485&q; data-width=&q;895&q;&g; Scorecard For The Major Averages
&l;img class=&q;size-full wp-image-59314&q; src=&q;http://blogs-images.forbes.com/investor/files/2019/02/190203DJID.jpg?width=960&q; alt=&q;&q; data-height=&q;572&q; data-width=&q;936&q;&g; Daily Chart For The Dow (&l;em&g;Courtesy of MetaStock Xenith&l;/em&g;)
The &l;strong&g;Dow Jones Industrial Average &l;/strong&g;(25,063.89 on February 1) set its all-time intraday high of 26,951.81 on October 3 and is 7% below this high. The Dow is up 15.4% from its December 26 low of 21,712.53. The daily chart shows the average above its 200-day SMA at 24,985. My weekly value level is 23,746 with my semiannual pivot is 24,340 and my monthly and annual risky levels at 25,827 and 25,819, respectively.
&l;img class=&q;size-full wp-image-59315&q; src=&q;http://blogs-images.forbes.com/investor/files/2019/02/190203SPXD.jpg?width=960&q; alt=&q;&q; data-height=&q;571&q; data-width=&q;935&q;&g; Daily Chart For The S&a;amp;P 500 (&l;em&g;Courtesy of MetaStock Xenith&l;/em&g;)
The &l;strong&g;S&a;amp;P 500 Index &l;/strong&g;(2,706.53 on February 1) set its all-time intraday high of 2,940.91 on September 21 and is 8% below this level. The S&a;amp;P is up 15.3% since trading as low as 2,346.58 on December 26. SPX is below its 200-day SMA at 2,741.47. My weekly value level is 2,560.0 with my semiannual pivot at 2,668.8 and monthly and annual risky levels at 2,791.9 and 2,867.1, respectively.
&l;img class=&q;size-full wp-image-59317&q; src=&q;http://blogs-images.forbes.com/investor/files/2019/02/190203NasdaqD.jpg?width=960&q; alt=&q;&q; data-height=&q;571&q; data-width=&q;936&q;&g; Daily Chart For The Nasdaq (&l;em&g;Courtesy of MetaStock Xenith&l;/em&g;)
The &l;strong&g;Nasdaq Composite &l;/strong&g;(7,263.87 on February 1) set its all-time intraday high of 8,133.30 on August 30 and is in correction territory, 10.7% below the high. The Nasdaq is up 17.3% since trading as low as 6,190.17 on December 24. The index is below its 200-day simple moving average at 7,453.12. My weekly value level is 6,895 with my semiannual pivot at 7,274 (tested last week) and annual and monthly risky levels at 7,370 and 7,485, respectively.
&l;img class=&q;size-full wp-image-59319&q; src=&q;http://blogs-images.forbes.com/investor/files/2019/02/190203DJTD-1.jpg?width=960&q; alt=&q;&q; data-height=&q;572&q; data-width=&q;936&q;&g; Daily Chart For Dow Transports (&l;em&g;Courtesy of MetaStock Xenith)&l;/em&g;
&l;strong&g;Dow Jones Transportation Average&l;/strong&g; (10,123.99 on February 1) set its all-time intraday high of 11,623.58 on September 14 and is in correction territory, 12.9% below the high. Transports is up 17.2% since trading as low as 8,636.79 on December 24. The 200-day SMA is 10,568.83. My weekly and semiannual value levels are 9.278 and 8,858, respectively, with monthly, quarterly and annual risky levels at 10,229, 10,882 and 10,976, respectively.
&l;img class=&q;size-full wp-image-59320&q; src=&q;http://blogs-images.forbes.com/investor/files/2019/02/190203RUTD.jpg?width=960&q; alt=&q;&q; data-height=&q;567&q; data-width=&q;938&q;&g; Daily Chart For The Russell 2000 (&l;em&g;Courtesy of MetaStock Xenith&l;/em&g;)
The &l;strong&g;Russell 2000&l;/strong&g; (1,502.05 on February 1) set its all-time intraday high of 1,742.09 on August 31 and is in correction territory, 13.8% below the high. The Russell 2000 is up 18.6% since trading as low as 1,266.92 on December 24. The 200-day SMA is 1,589.78. My weekly value level is 1,405.34 with semiannual and monthly pivots at 1,504.17 (tested Friday) and 1,509.34, respectively, and annual and quarterly risky levels at 1,590.63 and 1,619.28, respectively.
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&a;nbsp;&l;/p&g;
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