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Dow Jones Industrial Average (.DJI) after reports show slowing in September for both manufacturing and hiring

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Dow Jones Industrial Average (.DJI) after reports show slowing in September for both manufacturing and hiring

Stock indexes were nearing record high levels, until October and the fourth quarter began.

In the last two days the U.S. markets have fallen broadly, as investors began showing concern about fresh signs of an economic slowdown.

The Dow Jones Industrial Average’s losses deepened on Wednesday, bringing its two-day decline to 838 points. The Dow has lost 3.1% so far this quarter, already wiping out the 1.2% gain of the third quarter. It remains up 11.8% for the year.

The drop in the Dow began after a key measure of U.S. manufacturing saw its lowest reading in more than 10 years on Tuesday. September’s reading of manufacturing data from the Institute of Supply Management, or ISM, came in at 47.85% — the second consecutive month of contract for the index. Any reading of the ISM index below 50% signals a contraction.

Technical Indicators

Overall, the bias in prices is: Downwards.

The projected upper bound is: 26,867.46.

The projected lower bound is: 25,238.95.

The projected closing price is: 26,053.21.

Candlesticks

A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.

A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 3 falling windows in the last 50 candles–this makes the current falling window even more bearish.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 16.9457. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 5 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 36.06. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 40 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 -320.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 12 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 7 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed down -494.420 at 26,078.619. Volume was 18% above average (neutral) and Bollinger Bands were 35% narrower than normal.

Open     High      Low     Close     Volume___
26,425.85926,438.03925,974.11926,078.619 312,726,944
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 26,803.82 26,536.48 25,840.05
Volatility: 13 20 18
Volume: 275,046,208 271,821,856 294,176,960

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.

Summary

DJ INDU AVERG gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
DJ INDU AVERG is currently 0.9% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of .DJI at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .DJI and have had this outlook for the last 18 periods.

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