EB Daily Market Report - More Trade Setups - Wednesday, December 4, 2024

Brief Market Update

The Dow Jones Industrial Average is attempting to close above 45000 for the first time in history. At last check, the DJIA was trading at 45018, up 313 points (+0.70%) on the session. The S&P 500 is distancing itself further and further from 6000 and is now approaching 6100 for the first time. The NASDAQ 100 is up 1.13% to lead all of our major indices. The small cap IWM dipped into negative territory for a bit this afternoon, but has just turned positive. It, however, is underperforming its larger cap counterparts for the 3rd straight day.

The 10-year treasury yield ($TNX) opened up 5 basis points to 4.27%, but we've seen a complete reversal with the TNX finishing at 4.18%, or down 4 basis points. It ended squarely on its 50-day SMA.

Strength mostly came from aggressive sectors, particularly technology (XLK, +1.74%). Software ($DJUSSW, +2.60%) and semiconductors ($DJUSSC, +2.56%) are leading the charge in technology. Salesforce.com (CRM, +10.26%), a leader in software, beat its revenue and EPS estimates, resulting in a very nice gap higher this morning. It is hanging onto those opening gains at this time.

Trade Setups

I just wanted to point out a couple of real estate stocks (real estate typically does well in December) that might be poised to rally, if typical historical tendencies play out. These are both from our Strong Earnings ChartList (SECL) and have struggled over the past few days to a week:

IRM:

This is the 4th day in a row of weakness for IRM, but it's been a leader and it has a very strong AD line. So, when it does turn back to the upside, I could see a significant rally - perhaps to complete the right side of a cup in a bullish continuation cup with handle pattern.

CBRE:

I like the reversing hammer candlestick today on CBRE, bouncing back above its 20-day EMA, after briefly trading beneath it. If CBRE does lose its rising 20-day EMA support, I'd fully expect the price support level drawn above to hold on any further selling.

Happy trading!

Tom