The Stock Market Has Been Amazingly Resilient -- Check Out These 10 Charts

The major averages around the globe have been amazingly resilient. Even as bank stocks slump and oil prices slide, indices weighted to other market sectors are climbing to new highs.

I describe the investment strategy in the U.S. as a barbell, where investors buy tech stocks at the risky end of the spectrum, combined with the safety of utility stocks for the dividends at the other end. The Dow Utility Average is at an all-time intraday high on Friday morning. 

The technicals for the five major U.S. equity averages remain mixed. June began with new all-time intraday highs for the S&P 500 and Nasdaq Composite (NDAQ) . Overseas, the Nifty 50 and the German set new all-time intraday highs on Friday. New highs were set again at Friday's open.

If the Dow Jones Industrial Average (INDU) maintains pre-market strength on Friday, it too should trade higher than its March 1 all-time intraday high of 21,169.11. Dow Transports and Russell 2000 lag their all-time intraday highs of 9,639,33, set on March 1 and 1,425.70 on April 26, respectively. The Dow 30 set an all-time intraday high this morning.

The Nasdaq Composite set its all-time intraday high of 6,247.07 on Thursday approaching my annual and semiannual risky levels of 6,253 and 6,387, respectively. Today's new high is within my risky area, so its time to reduce holdings.

Overseas, the Nikkei 225 set its 2017 high of 20,239.81 on June 2, while the nifty 50 and German DAX set all-time intraday highs of 9,673.50 and 12,878.59, respectively. The Shanghai Composite remains the laggard with the Chinese benchmark still under a negative weekly chart and 40% below its June 12, 2015 bubble peak of 5,178.19.

Here's This Week's Scorecard
Here's This Week's Scorecard

India's Nifty 50 has the largest year-to-date gain of 17.9% year to date up from 17.2% a week ago. The Nasdaq is up is up 16% year to date on Thursday, up from 15.3% a week ago. On the weak side of the ledger, Dow transports is the laggard up just 2.6% year to date. Japan's Nikkei 225 is up 5.6% year to dat,e but is 3.7% below its June 24, 2015 high of 20,952.71. China's Shanghai Composite is up just 0.1% year to date, and deep in bear market territory 40% below its June 12, 2015 high of 5,178.19.

When looking the weekly charts below, keep an eye on the 200-week simple moving averages shown in green is considered the "reversion to the mean" for each global average. The "reversion to the mean" is an investment theory that the price of an index, will eventually return to a longer-term simple moving average. A logical choice that's easy to track is the 200-week simple moving average. A ticker trading above its 200-week simple moving average will eventually decline back to it on weakness. Similarly, a ticker trading below its 200-week simple moving average will eventually rebound to it on strength.

Japan's Nikkei 225
Japan's Nikkei 225

Courtesy of MetaStock Xenith

The weekly chart for the Nikkei 225 is positive with the index above its key weekly moving average of 19,533.92. The 200-week simple moving average is the "reversion to the mean" of 17,156.84. Weekly momentum ended the week at 76.39 up from 71.86 on May 26. Buy weakness to my quarterly value level of 16,876. Strength has reached my annual risky level, now a pivot at 20,169. Sell strength to my monthly and semiannual risky levels of 21,240 and 24,195, respectively.

China's Shanghai Composite
China's Shanghai Composite

Courtesy of MetaStock Xenith

The weekly chart for the Shanghai Composite is negative with the average below its key weekly moving average of 3,135.56. The 200-week simple moving average or the "reversion to the mean" is a major support at 2,902.43. Weekly momentum ended the week at 31.00 down from 31.15 on May 26. Buy weakness to my quarterly value level of 2,776. Reduce holdings on strength to my monthly, semiannual and annual risky levels of 3,321, 3,582 and 3,879, respectively.

India's Nifty 50
India's Nifty 50

Courtesy of MetaStock Xenith

The weekly chart for the Nifty 50 remains positive but overbought with the average above its key weekly moving average of 9,376.12. The 200-week simple moving average or the "reversion to the mean" is a 7,836.18. Weekly momentum ended the week at 90.60, well above the overbought threshold of 80.00. Buy weakness to 8,740 and 8,272, which are my monthly and quarterly value levels, respectively. Reduce holdings on strength to my semiannual and annual risky level of 9,431 and 10,545, respectively, the high of 9,604.90 is within this range.

Germany's Deutsche Boerse DAX
Germany's Deutsche Boerse DAX

Courtesy of MetaStock Xenith

The weekly chart for the German DAX remains positive but overbought with the average above its key weekly moving average of 12,526.29. The 200-week simple moving average or "reversion to the mean" is 10,295.84. Weekly momentum is projected to end the week at 87.11, sliding from 87.39 on May 26, still well above the overbought threshold of 80.00. Buy weakness to my quarterly value level of 9,725. My semiannual and annual risky levels of 12,716 and 12,844, respectively, have been tested and are now pivots. Sell strength to my monthly risky level of 13,075.

Dow Jones Industrial Average
Dow Jones Industrial Average

Courtesy of MetaStock Xenith

The weekly chart is positive with the average above its key weekly moving average of 20,888.39. The 200-week simple moving average or "reversion to the mean" is 17,584.06. Weekly momentum is projected to end the week rising to 74.25 up from 69.83 a week ago, Buy weakness to my quarterly value level of 19,189. My semiannual pivot is 20,893. My annual value level is 15,111. Sell strength to my monthly, annual and semiannual risky levels of 21,987, 22,042 and 22,148, respectively.

S&P 500
S&P 500

Courtesy of MetaStock Xenith

The weekly chart is positive but overbought with the average above its key weekly moving average of 2,389.70. The 200-week simple moving average or "reversion to the mean" is 2,033.83. Weekly momentum is projected to rise to 84.09 this week rising more above the overbought threshold of 80.00. Buy weakness to my quarterly value level of 2,225.2. My annual value level lags at 1,676.1. Sell strength to my monthly and semiannual risky levels of 2,448.8 and 2,492.4, respectively. My annual and semiannual risky levels are 2,537.9 and 2,608.9, respectively.

Nasdaq Composite
Nasdaq Composite

Courtesy of MetaStock Xenith

The weekly chart remains positive but overbought with the average above its key weekly moving average of 6,074.86. The 200-week simple moving average or "reversion to the mean" is 4,795.25. Weekly momentum is projected to end the week at 91.73, still well above the overbought threshold of 80.00. Buy weakness to my quarterly value level of 5,512. My semiannual and monthly pivots are 5,946 and 6,164, respectively. My annual value level is 4,331 with annual and semiannual risky levels at 6,253 and 6,387, respectively.

Dow Jones Transportation Average
Dow Jones Transportation Average

Courtesy of MetaStock Xenith

The weekly chart is positive with the average above its key weekly moving average of 9,121.84. The 200-week simple moving average or "reversion to the mean" is 8109.54. Weekly momentum is projected to end the week rising to 40.78, up from 32.93 on May 26. My annual and quarterly value levels are 7,910 and 7,741, respectively. Sell strength to my monthly and semiannual risky levels of 9,974 and 9,980, respectively. Annual and semiannual risky levels are 10,167 and 10,713, respectively.

Russell 2000
Russell 2000

Courtesy of MetaStock Xenith

The weekly chart will be neutral given a close on Friday above its key weekly moving average of 1,382.52. The 200-week simple moving average of "reversion to the mean" is 1,190.00. Weekly momentum is projected to slip to 51.93 this week down from 52.06 on May 26. Buy weakness to my quarterly value level of 1,222.14. My annual value level is 1,091.77. Sell strength to my monthly and semiannual risky levels of 1,447.49 and 1,487.52, respectively. My annual and semiannual risky levels are 1,548.95 and 1,549.50, respectively.

Advertisement

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

More from Stocks

Jim Cramer Gives Investors Advice on Market Volatility

Jim Cramer Gives Investors Advice on Market Volatility

Dow Dives on Earnings Disappointments From Caterpillar, 3M

Dow Dives on Earnings Disappointments From Caterpillar, 3M

Why Amazon Is One of Jim Cramer's 10 Best Stocks for a Market Pullback

Why Amazon Is One of Jim Cramer's 10 Best Stocks for a Market Pullback

Jim Cramer on What to Expect in the Market This Week

Jim Cramer on What to Expect in the Market This Week

Jim Cramer Previews Boeing and Mattel's Earnings

Jim Cramer Previews Boeing and Mattel's Earnings