The Dow is Dead, Long Live the Dow with Nick Santiago (Ep #104)

from Daily Market Wisdom with Nick Santiago

For more than 20 years, Master Trader Nick Santiago has been beating the markets. He’s made some incredible calls along the way and now he’s looking to spread the word. There’s no reason that the average trader should be coming up short. So now we’ve started a daily show to bring you up to date on the latest market developments. Nick will be sharing trades and concepts and discussing current trends. Today we discuss:

1. There was a reshuffling announced in the Dow Jones Industrial Average last night. It looks as if (CRM) will replace Exxon Mobil (XOM), Amgen (AMGN) will replace Pfizer (PFE), and Honeywell (HON) will replace Raytheon Technologies (RTX) in the DJIA 30. This news is giving these news additions to the DJIA a lift this morning. The official date for the change will be on Monday, August 31, 2020. Major indexes are lower on very light volume. Easy to see them go higher later in the date, but otherwise it’s a backing and filling day.

2. Best Buy (BBY) is selling off after reporting earnings this morning. The earnings were solid, but the chart was already parabolic. This tells us that the stock was priced for perfection and this is a simple sell the news event. This is a perfect reason why you should not trade in front of earnings especially when the stock is parabolic.

3. Yesterday, the financial stocks caught a bid. The $KBE, $JPM, $BAC, $C and other closed nicely higher. For the first time in a long time. Today, they are starting out strong, but it will be important to see if they can hold into the close. Remember, the financials have been laggards for a long time. We shall see if this can start to show some strength and possible leadership.

4. We’ve missed the boat on housing. Still very strong. Waiting for a consolidation. The bus left the station without Nick. Very overbought right now. But financials aren’t and gold and gold miners working off overbought condition. Same with biotechs. Healthcare names pulling back. Look for things on sale.

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