The Dow Jones Industrial Average Peaked In January, 2022. Now What?
The Dow Jones Industrial Average is mentioned these days mostly as an afterthought. Who really cares about such an old fashioned index when all the fun is being had over in the NASDAQ-100? 30 stocks that your grandfather liked when you could own all of these hot artificial intelligence names?
The problem is that these components of the Dow represent the backbone of American industry and, even if’s unclear whether or how much “AI” benefits or affects them, it’s hard for some to get excited about the economy when this major index has down trended since January, 2022.
Warrent Buffett’s favorite tech stock, Apple, is a part of the Dow Jones Industrials and it’s had a good run, but what about some of the other name brands that make up the average? There is not a Nvidia-style blast upward among them. It’s quite a negative divergence when displayed beside the NASDAQ-100.
Dow Jones Industrial stocks in down trends:
MMM weekly price chart:
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The big conglomerate peaked in mid-2021 at $190. The red-dotted down trend line connects that price with the $185 high seen later in that year. Note that the 50-week moving average crossed below the 200-week moving average in mid-2022 and that the price remains below both.
Boeing weekly price chart:
Although the stock recently crossed above its down trending 200-week moving average, the price remains below the early 2021 high of just below $280. Boeing is continuing to recover from the devastating early 2020 sell-off that it to below $100. The company had traded as high as $440 in early 2019.
Goldman Sachs weekly price chart:
Nike daily price chart:
That the price has dropped to below both its 50-week moving average as well as its 200-week moving average is unfortunate for investors. After trading just above $130 earlier this year — and approaching $128 in early May — Nike is now down to $105 for a one-month slide of 19%.
Verizon weekly price chart:
The red-dotted downtrend line connecting the April, 2022 high with the January, 2023 sudden uptick high shows the steepness of the drop. The 50-week moving average crossed below the 200-week moving average in May, 2022. Can Verizon maintain the previous support level of $32/$34?
These downward trends in 5 major components of the Dow Jones Industrials are helping to keep it from looking anything like the NASDAQ-100 right now. This week’s CPI and PPI numbers may affect things as well as whatever moves the Fed makes afterwards.