The stock indexes finished higher once again on Friday. The Dow Jones Industrial Average and the S&P 500 both closed at all-time record highs in what has now become a common occurrence. The DJIA finished higher by 58.69 points to close at 17,958.79. The S&P 500 was higher by 3.45 to finish at 2,075.37. The Nasdaq was up 11.32 to close at 4,780.75 and the Russell 2000 finished up 9.42 at 1,182.43.
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The market rise on Friday comes on the heels of the non-farm payrolls report, which showed a rise of 321,000 in November, much greater than expected and a bullish sign for the economy. Wage gains were up, also, but skewed to higher-paid workers.
So, what does this all mean for the stock market going forward?
The DJIA and the S&P 500 have now completed seven consecutive weeks in a row in positive territory. Technical indicators seem to be saying that the stock indexes are overbought and in need of a rest. Caution should be used in chasing this market to the upside.
From a technical standpoint, stock indexes continue to climb higher in the face of many negative daily divergences, meaning that buying strength is weakening. The weekly index numbers for the DJIA and Russell 2000 will be extremely overbought if they open up on Monday. The Nasdaq and the S&P 500 will both be overbought.