Squawk Morning Briefing: The CAT Came Back?

CAT has been an extremely strong stock lately.  In fact, since late June it has been persistently above the very upper FibGrid fire line at 103.25 based on the values we distribute with FibGrid Stock Update.    After earnings this morning, CAT has come down as low as 104.09 in pre-market trading as of this writing at 8:40.   That approaches, but doesn’t reach the fire line.  So while most of the gains from late June have been lost, this industrial name remains above important support.   Everything we know suggests that 103.25 is an important level; above it would remain bullish for CAT and below bearish.

As one of the highest priced stocks in the DJIA, it can significantly impact the price-weighted index.   Right now the stock looks poised to drop over six Dollars at the open, which would translate to over a 48 point drop in the DJIA due to CAT alone.    That’s a big deal for the move in one stock.   On the flip side, GE is up close to 2% on earnings  in pre-market trading.   But for a stock trading in the $19 range, that’s a tiny amount in absolute Dollar terms.   So what is a big move for GE is only a 3-4 point gain for the DJIA because it is a price-weighted index.

Of  course the DJIA chart should tell us what we need to know about the overall picture and we update our charts and outlook for equities, currencies, and treasuries in today’s videos.

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