The Tell: It’s rare for the Dow to have ramped up like this — here’s what typically happens next

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The Dow Jones Industrial Average just scored its biggest weekly gain of the year, stretching its 2017 rise to 23%. Even the bulls are saying it’s time for a pause.

The blue-chip barometer stands more than 11% above its 200-day moving average, and that’s an unusual achievement, said Jonathan Krinsky, chief market technician at MKM Partners, in a note dated Sunday.

“Over the last twenty years, that has been a fairly rare occurrence, happening just seven other times,” Krinsky wrote.

“One of those came off the 2009 bear market low, so we will exclude that. The six other times led to at least some sort of pause in the trend, even if it continued higher later on.”

The 200-day moving average is a chart level that traders often use to help smooth out some of the noise found in an index’s daily moves.

Krinsky shared the chart below with his clients, with the red arrows indicating the points when the Dow DJIA, -0.17%  has closed more than 11% above its 200-day line and then typically caught its breath.

MKM

Time for the pause that refreshes?

“A pause is warranted,” but it’s “unlikely to be the top,” the MKM technical analyst said. “Strength begets strength, and history suggests it is unlikely that the bull market is over at this point.”

There was no sign of a rest for the U.S. stock market early Monday, with Dow futures YMZ7, +0.85%   rising by more than 200 points following last week’s 674-point climb. Investors were cheering the news that Senate Republicans had passed a sweeping overhaul of the tax code.