Dow components Home Depot, McDonald’s and Merck set new all-time intraday highs in August on positive reactions to earnings. Meanwhile, 3M Company, Pfizer and Walgreens set cycle lows in August.
Stocks that are components of the Dow Jones Industrial Average are supposed to be conservative investments, but this notion is no longer true. Part of the problem is selection of the components. The other issue is allowing computerized trading models that block American investors from getting fair execution on buy and sell orders. The stock market has become a gamblers speculation game that has left Main Street investors scratching their heads. This causes day-to-day flash crashes followed by speculative spikes higher.
S&P Dow Jones Indices determine the 30 components of the Dow but today I say there are only 29 . They made a dumb choice when they replaced DowDuPont (DWDP) with Dow Inc. (DOW) as Dow Chemical does not have a price history. The first day of trading for DOW is March 20, 2019, so investors do not even know the year-to-date performance.
Here’s a Scorecard for the Dow 29
Global Market Consultants
Home Depot (HD) – Set its all-time intraday high of $222.66 on August 22 and the stock is not cheap with a P/E ratio of 21.61 and a dividend yield of just 2.47%. Despite setting a new high the weekly chart is not positive. My call is to sell strength to its semiannual risky level at $226.61 or reduce holdings on a sell-stop given a weekly close below its annual pivot at $207.32.
McDonald’s (MCD) – Set its all-time intraday high of $221.93 on