Dow Jones Industrial Average (.DJI) biggest rally in eight months

Dow Jones Industrial Average (.DJI) biggest rally in eight months

Dow Jones Industrial Average (.DJI) biggest rally in eight months

Stocks ripped higher on Wednesday after Federal Reserve Chairman Jerome Powell said interest rates are close to neutral, a change in tone from remarks the central bank chief made nearly two months ago.

The Dow Jones Industrial Average climbed 617.70 points, or 2.5 percent, to 25,366.43, posting its biggest one-day gain since March 26. The 30-stock index also notched its second-best day of the year and is up more than 1,000 points for the week.

Powell’s comments were eagerly awaited by investors as they worried the central bank may be tightening monetary policy too quickly. The Fed is largely expected to raise rates by 25 basis points next month. The central bank has already hiked rates three times this year. Traders now see only one more hike fully prices in for 2019.

The Fed’s decisions on monetary policy have drawn criticism from the White House recently. President Donald Trump told the Washington Post that he wasn’t “even a little bit happy” with his appointment of Powell as the Fed’s Chair, adding that he thought the central bank’s recent actions were “way off-base.”

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 25,384.18.

The projected upper bound is: 26,268.02.

The projected lower bound is: 24,429.62.

The projected closing price is: 25,348.82.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 5 rising windows in the last 50 candles–this makes the current rising window even more bullish.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 72.0305. This is not an overbought or oversold reading. The last signal was a buy 1 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 52.53. 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 23 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 11. This is not a topping or bottoming area. The last signal was a buy 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 7 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERAGE closed up 617.699 at 25,366.430. Volume was 18% above average (neutral) and Bollinger Bands were 48% wider than normal.

Open High Low Close Volume___
24,832.84025,368.93024,832.84025,366.430 362,160,928

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 24,877.21 25,614.28 25,101.61
Volatility: 26 23 18
Volume: 335,747,008 344,487,328 334,781,408

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 AVERAGE gapped up today (bullish) 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 AVERAGE is currently 1.1% above 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 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 6 periods.

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