American Express, Boeing, 5 Others Are Dragging Down the Dow 30

NEW YORK (TheStreet) - As July began I showed that each of the five major averages had positive weekly charts. Even so, I suggested that investors be aware of the risks associated with the wide spreads between annual value levels and monthly, quarterly and semiannual risky levels.

Since the weekly charts were positive new highs were possible despite the "Black Hole" pattern I described.

All-time or multiyear intraday highs and the dates they were set are 17151.56 (on July 17) Dow Industrials, 1991.39 (on July 24) S&P 500, 4485.93 (on July 3) Nasdaq, 8515.04 (on July 23) Dow Transports, and 1213.55 (on July 1) Russell 2000.

All five major equity averages ended last week below their five-week modified moving averages at 16814 Dow Industrials, 1949.8 S&P 500, 4369 Nasdaq, 8195 Dow Transports and 1150.95 Russell 2000. The 12x3x3 weekly slow stochastics remain overbought except for the Russell 2000.

The July 31 monthly closes established monthly risky levels below the highs set in July at 16871 Dow Industrials, 1970.2 S&P 500, 4450 Nasdaq, 8292 Dow Transports and 1156.01 Russell 2000.

In the midst of this developing dynamic, on July 11, I talked about a flock of black swans cycling the "Black Hole" and it appears that this flock is growing.

Given negative weekly closes for all major averages the first downside risks remain my semiannual value levels at 16301 Dow Industrials, 1789.3 S&P 500, 3972 Nasdaq, 7423 Dow Transports and 1139.81 Russell 2000.

The downside risk below these levels are annual levels at 14835 and 13467 Dow Industrials, 1539.1 and 1442.1 S&P 500, 3471 and 3063 Nasdaq, 6249 and 5935 Dow Transports and 966.72 and 879.39 on the Russell 2000.

Let's look at the weekly chart for the Dow Jones Industrial Average.

Courtesy of MetaStock Xenith

The weekly chart for the Dow 30 (16493) shows the close below the five-week modified moving average at 16812. A close below this level this week makes the weekly chart negative. The up trend that connects the March 2009 low at 6470 though the October 2011 low at 10414 comes in at 14761 at the end of August. This level lines up with my annual value level at 14835. The 200-week simple moving average is the longer-term reversion to the mean at 13,676.

The short-term reversion to the mean is the 200-day simple moving average at 16322. There are 12 Dow 30 components that ended Friday below their 200-day SMAs and seven have underperformed the Dow since July 3.

Let's compare the performances of these seven since my July 7 post covering the Dow 30 pre-earnings. Note that the Dow is down 3.4% since July 3.

American Express (AXP) ($86.47) is down 9.8% since July 3 and set an all-time intraday high at $96.24 on July 1 with its 200-day simple moving average at $88.56. The weekly chart was positive but overbought on July 3 but is now negative with its five-week MMA at $91.81. A semiannual value level is $83.59 with weekly and monthly risky levels at $90.53 and $93.78, respectively.

Boeing (BA) ($120.38) is down 6.3% since July 3 and has been below its 200-day SMA at $130.52 since June 25. The weekly chart remains negative with its five-week MMA at $126.84. A weekly value level is $116.44 with semiannual and monthly risky levels at $122.99 and $123.60, respectively.

General Electric (GE) ($25.35) is down 5.6% since July 3 and has been below its 200-day SMA at $26.32 since July 21. The weekly chart is negative with its five-week MMA at $26.24. Annual value levels are $16.89 and $16.11 with a weekly pivot at $25.52 and monthly and semiannual risky levels at $26.10 and $26 94, respectively.

Coca Cola (KO) ($39.29) is down 7% since July 3 after setting its 2014 intraday high at $42.57 on July 21. The stock closed below its 200-day SMA at $39.89 on July 30. The weekly chart was positive but overbought on July 3 and is now negative with its five-week MMA at $41.04 and its 200-week SMA at $36.88. An annual value level is $38.28 with a monthly pivot at $39.33 and quarterly and weekly risky levels at $40.35 and $41.49, respectively.

McDonald's (MCD) ($94.30) is down 6.6% since July 3 after breaking below its 200-day SMA at $97.80 on July 21. The weekly chart remains negative with its five-week MMA at $98.56 and its 200-week SMA at $91.55. A weekly pivot is $95.58 with monthly and annual risky levels at $97.93 and $99.30, respectively.

Pfizer (PFE) ($28.86) is down 5.5% since July 3 and has been below its 200-day SMA at $30.75 since July 21. The weekly chart is negative with its five-week MMA at $29.88. An annual value level is $24.86 with semiannual and monthly pivots at $28.66 and $29.07 and weekly, quarterly and semiannual risky levels at $30.18, $34.31 and $35 56, respectively.

United Technologies (UTX) ($104.75) is down 9.3% since July 3 and has been below its 200-day SMA at $113.41 since July 22. The weekly chart remains negative with its five-week MMA at $112.33 and its 200-week SMA at $89.81. Annual value levels are $103.38 and $92.88 with semiannual and weekly pivots at $105.86 and $106.72, respectively, and monthly and semiannual risky levels at $117.29 and $122.52, respectively.

At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.

Follow @Suttmeier

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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