Beyond The Dow Jones Industrial Average (.DJI): A Rush For Income And Yield
The Dow Jones utility average inched higher as U.S. government long bonds continued to streak higher. The yield on the benchmark 10-year note plunged 7 basis points to 2.07%. On Jan. 1, the note yielded 2.69%.
In afternoon trading, St. Louis Federal Reserve bank chief James Bullard reportedly voiced support for a future cut in short-term interest rates. In prepared remarks for a talk in Chicago, Bullard said a “downward policy rate adjustment may be warranted soon to help re-center inflation and inflation expectations at target and also to provide some insurance in case of a sharper-than-expected slowdown,” Bloomberg reported.
CME Group calculated that current trading in fed funds rate futures showed a 67.2% probability that the Federal Reserve will shave short-term interest rates by a quarter point to a target range of 2%-2.25% at its July 30-31 meeting. The current target range is 2.25%-2.5%.
The U.S. central bank raised the cost of money four times in 2018, sending the fed funds rate up a full percentage point to 2.25%-2.5% from 1.25%-1.5% in December 2017.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 25,651.61.
The projected upper bound is: 25,367.35.
The projected lower bound is: 24,226.50.
The projected closing price is: 24,796.92.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 13.8142. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 27 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 29.98. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 13 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -160.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 5 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 25 period(s) ago.
Rex Takasugi – TD Profile
DJ INDU AVERG closed up 4.740 at 24,819.779. Volume was 10% above average (neutral) and Bollinger Bands were 23% wider than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 25,368.89 25,991.74 25,425.74
Volatility: 13 14 20
Volume: 279,998,048 286,995,264 319,774,976
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
DJ INDU AVERG is currently 2.4% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of .DJI (mildly bearish). Our trend forecasting oscillators are currently bearish on .DJI and have had this outlook for the last 17 periods. Our momentum oscillator is currently indicating that .DJI is currently in an oversold condition.