Dow Jones Industrial Average (.DJI) another turbulent day on Wall Street

Dow Jones Industrial Average (.DJI) another turbulent day on Wall Street

Dow Jones Industrial Average (.DJI) another turbulent day on Wall Street

It was another turbulent day on Wall Street as rapidly falling oil prices weighed on the stock market. Investors appeared to be moving to shed risk from their portfolios.

Futures on West Texas Intermediate crude oil for June delivery plunged 43.4% to $11.57 a barrel as the combination of oversupply and weak demand is threatening to fill up storage capacity in the U.S. On Monday, the May WTI contract, which expires Tuesday, went negative, marking the first time the price of oil has traded below zero.

Shayne Heffernan Trade Idea

“If we ever needed a reminder for the extent of the abrupt decline in global economic activity, it is the fact that WTI oil futures saw a negative price. Oil is a residual issue of the broader global “stay at home” and this situation will not change until Western nations and US states begin opening up. And they cannot open up until each jurisdiction feels they have a handle on the healthcare crisis.”

” I am not a buyer in here, I am punting futures when they get out of whack in the short term and keeping cash for the July September sell off” Shayne Heffernan PhD in Economics

Why This Matters

Traders were focused on the strange happenings with oil futures once again, which raised concern about deep losses for the energy industry hitting the U.S. economy even further. The June contract for West Texas Intermediate settled down 43.4% at $11.57 per barrel.

That sharp decline came a day after the May contract, which expired Tuesday, went negative, meaning producers would pay for someone to take the oil off their hands. The bizarre move had to do with the fact that because of the coronavirus shutdowns, big buyers of oil like refineries don’t need any more oil because their tanks are nearly filled. That May contract clawed back into the black on Tuesday.

The United States Oil Fund, an exchange-traded security for the retail investors which buys oil futures, tanked 25.33% to just $2.80. Marathon Petroleum and ConocoPhillips were among the biggest decliners in the S&P 500 energy sector, falling more than 3% each.

President Donald Trump tweeted that he instructed the Energy and Treasury departments to “formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future.”

Stocks dropped on Monday to start another volatile week, with the Dow falling nearly 600 points, as an unprecedented plunge in oil prices weighed on investor sentiment.

Late Monday, Trump said he would sign an executive order to temporarily suspend immigration to the United States to protect jobs “in light of the attack from the Invisible Enemy.” Millions of Americans have filed for unemployment benefits as the coronavirus pandemic shuts down economic activity in much of the country.

Trump’s tweet did not provide specifics on what the order would entail.

Investors continued to monitor the coronavirus pandemic and the country’s plan to reopen the economy. Signs have emerged that New York is past the worst of its outbreak. Georgia on Monday rolled out aggressive plans to reopen the state’s economy, calling for many businesses to reopen their doors as early as Friday.

Stocks enjoyed their first back-to-back weekly gains since early February on Friday as investors grew more optimistic that the pandemic is easing off. The S&P 500 is now about 19% from its record high on Feb. 19, cutting about half of its losses during the coronavirus sell-off.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 26,225.53.

The projected lower bound is: 20,072.33.

The projected closing price is: 23,148.93.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 33 white candles and 17 black candles for a net of 16 white candles.

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 33.4709. This is not an overbought or oversold reading. The last signal was a sell 2 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 42.49. 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 sell 18 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 -191.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 2 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 2 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed up 1,101.721 at 23,018.881. Volume was 62% above average (neutral) and Bollinger Bands were 47% wider than normal.

Open        High        Low          Close        Volume
21,227.381  24,264.211  20,735.020   23,018.881   7,000,064,000
Technical Outlook
Short Term:         Neutral
Intermediate Term:  Bearish
Long Term:          Bullish
Moving Averages: 10-period        50-period        200-period
Close:           26,242.19        23,276.47        15,226.42
Volatility:      115              81               76
Volume:          6,835,579,392    5,958,000,128    4,590,491,136

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 is currently 51.2% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods.

There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of .DJI at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .DJI and have had this outlook for the last 1 periods.

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