- US stocks set for highest ever open
- Last week all 3 major US indices (US500, US100, US30) posted large gains
- US30 riding the upper bound of its Bollinger band
Following a bright start to the New Year for US stocks, the benchmarks are set for their highest ever open when the cash session gets underway in less than 30 minutes at 2:30pm. The US30 is set to trade at its highest ever level on the open when the bell sounds, after the market ended last week at its highest ever level.
The US30 is hugging the upper channel of its Bollinger band on D1. Source: xStation
Looking at a D1 chart of the US30 it is clear that the market is in a strong uptrend with the price trading near the upper channel of its Bollinger band for the majority of the time since August. The band is constructed as 2 standard deviations above the average (with the average being the 21 SMA) and to trade in such close proximity to it for so long highlights how strongly price has been moving higher.
It is not just the US30 that has been in a bullish mood, with both the US500 and US100 rallying last week with all three ending on Friday at all-time highs. The US500 (S&P 500 underlying) gained more than 2% last week and barring a decline today there could be a very good omen about to occur for the market. Since 1950 the S&P500 was higher for the year all 15 times that the first five days showed a gain in excess of 2%, and what is more, the average return when this occurs is an incredible 18.6%.
A close this evening above 2740.6 would mark a 2% gain in the first five trading days of 2018. When this occurs it has historically been a very positive omen for the market. Source: xStation
The market was trading at 2686.9 on the first Wall Street open of the year and therefore the 2% gain level needed to be closed above to qualify 2018 as matching previous years with a 2%+ rise in the first 5 trading days is 2740.6. A close above 2740.6 tonight at 9PM (GMT) would be a positive development for the bulls who believe in historical statistics.
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