Dow Jones Industrial Average (.DJI) Closes Higher Despite Bad News

Dow Jones Industrial Average (.DJI) Closes Higher Despite Bad News

Dow Jones Industrial Average (.DJI) Closes Higher Despite Bad News

Stocks in the cyclical sectors, including financials , industrials and energy provided the biggest boost to the two indexes.

Trillions of dollars in stimulus and also the restarting of businesses have helped the benchmark S&P 500 recover about 40 per cent from its March lows, leaving it only about 10 per cent below a record high hit in mid-February.

“The USA equity market continues to rally despite the very fact that we’re clearly in a recession,” said Shayne Heffernan, CEO and Founder of Heffx. “Most investors believe that firms are going to be able to come out of this on the other side, actually in better shape.. more efficient and more streamlined.”

Traders were keeping a close eye on tensions between the United States and China over the coronavirus and trade, as well as the anti-police brutality marches and rallies where they have clashed with police in some cities.

Overnight, a fire broke out at a strip mall in Los Angeles, looted stores in New York City and at least five cops were hit by gunfire, hours after President Donald Trump vowed to deploy the United States military to regain control.

If this goes on for much longer the market will begin to reflect the nervousness of the public and the economy here in the United States.

Technology-focused companies, including Amazon.com, Facebook Inc and Apple Inc have led the market recovery, were marginally lower on Tuesday.

Shares of Western Union jumped 11.1 per cent after a report that the money transfer company has made an offer to buy its smaller rival MoneyGram International Inc.

MoneyGram shares soared 33.6 per cent.

Advancing issues outnumbered decliners by a 2.97-to-1 ratio on the NYSE and by a 1.41-to-1 ratio on the NASDAQ.

The S&P index recorded 10 new 52-week highs and no new lows, while the NASDAQ recorded 56 new highs and 3 new lows.

Price Performance

Top Movers

Bottom Movers

Shayne Heffernan Trade Idea

“You can’t justify the rally right now from a fundamental perspective.” Shayne Heffernan PhD in Economics

Technical Analysis

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 24,929.66.

The projected upper bound is: 27,670.70.

The projected lower bound is: 24,077.35.

The projected closing price is: 25,874.02.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white 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 9 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 78.8256. This is not an overbought or oversold reading. The last signal was a sell 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 64.93. 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 48 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 109.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 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 buy 8 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed up 267.631 at 25,742.650. Volume was 26% below average (neutral) and Bollinger Bands were 32% narrower than normal.

Open         High        Low          Close         Volume
25,582.520  25,743.131   25,523.740   25,742.650    355,236,576
Technical Outlook
Short Term:        Overbought
Intermediate Term: Bullish
Long Term:         Bearish
Moving Averages: 10-period      50-period        200-period
Close:           25,026.68      23,494.82        26,295.67
Volatility:      23             53               46
Volume:          382,001,088    468,521,504      355,613,856

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 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 AVERG is currently 2.1% below its 200-period moving average and is in an upward trend. Volatility is low 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 5 periods.

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