Wall Street benchmarks reaching for blue skies; DJIA stochastics are overbought

We saw slight gains in benchmarks on Wall Street with an advance in the financial sector and despite yesterday's less than impressive results from top financial institutions. However, gains were capped by weaker health-care providers. As a result, the S&P 500 index eeked out a very modest 0.1% to 2,907 as the Health Care Select Sector declined by 2.1% vs the financial sectors ETF climbed 1.4%, to lead the broad-market.  The Dow Jones Industrial Average (DJIA), +0.26% added 68 points, or 0.3%, at 26,452.45, somewhat anchored by UnitedHealth Group Inc shares ending down -4.1%. 

US data

"Headline industrial production missed expectations in March, falling 0.1% (+0.2% expected). Overall industrial production is now down 0.4% annualised for the quarter, the weakest since late-2017. The data suggest that US manufacturing activity has yet to find a bottom, despite some more positive global momentum recently," analysts at ANZ explained.

Earnings post-close

• IBM Q1 19 Earnings Results:

Op. EPS: $2.25 (Estimate $2.22) / Revenue: $18.2B (Estimate $18.4B)

• CSX Q1 19 Earnings Results:

EPS: $1.02 (Estimate $0.91) / Revenue: $3.01B (Estimate $3.02B)

• Netflix Q1 19 Earnings Results:

EPS: $0.76 (Estimate $0.57) / Revenue: $4.52B (Estimate $4.50B)

DJIA levels

The technical picture looks bullish on the daily charts while the price inches higher above the daily 20 and 50 EMA with bulls in pursuit of the October highs. However, stochastics are in overbought territory which should be a warning to bulls. A correction will target the 20-D SMA and 26000 ahead of the 25700s. The 200-DMA is critical at that juncture which meets the 23.6% Fibo retracement of the late Dec rally guarding a break all the way down to 24800 gap area and S2 ahead of the 24500s and then 50% of the upside run made at the end of Dec at 24150.