Upside breadth, while positive, not particularly strong

Rivkin Investment Team

US equity markets pushed higher on Monday, with the Dow Jones Industrials Average (DJIA) gaining 45.19 points (+0.42%) to close the day at 10,698.75, while the S&P500 added 6.15 points (+0.55%) to finish the session at 1,127.79.

Upside breadth, while positive, was not particularly strong, with 25 (83.3%) of the 30 Dow stocks, and 392 (78.4%) of the 500 S&P constituents, closing the day up. All ten sectors which comprise the S&P500 closed the day in the green, led by the telecommunications (+1.06%), consumer services (+0.84%), financials (+0.70%), and basic materials (+0.64%).

Technically, the chart structure for the Dow Jones is very similar to that of the S&P500, which we covered in detail in last night’s report. To reiterate, we believe that the current uptrend beginning in early July is corrective in nature and close to completing. From a pattern perspective, rising wedges such as this are typically retraced in full, meaning we would expect to see a move back towards the 10,000 level as a minimum. Our preferred Elliott Wave count suggests even lower levels are probable.

The ASX SPI200 (September 10) futures contract added 4 points in overnight trade, to be currently at 4563.

From the commodity markets and the CRB Index dipped 0.12 points (-0.044%) on Monday to close at 274.59. Coffee and nickel were the top performing commodities, gaining by 1.42% and 1.03% respectively, while natural gas (-3.60%), sugar (-2.80%), and wheat (-1.52%) were the weakest commodities on the day.

Looking at the currencies, and the US dollar was largely stronger on Monday, gaining the most against the Swiss franc (+1.00%), New Zealand dollar (+0.63%), and Norwegian krone (+0.53%). The Australian dollar is currently buying 91.65 US cents, 57.67 British pence, 69.32 Euro cents, and 78.76 Japanese yen.