Dow Jones Industrial Average (.DJI) Continues Normal Pullback

Dow Jones Industrial Average (.DJI) Continues Normal Pullback

Dow Jones Industrial Average (.DJI) Continues Normal Pullback

The stock market continued to pull back Thursday morning, as the Dow Jones Industrial Average and S&P 500 headed toward their seventh loss in eight sessions. Financial data and news came in mixed.

After 10 straight weeks of gains for the Nasdaq composite, the market was due for a breather, which is good for the longer-term uptrend. Growth stocks were outperforming Thursday afternoon with the IBD 50 up 0.2%.

Blue chips in the Dow Jones were almost uniformly down as the index dropped 0.8% after being down as much as 1.2%. The Nasdaq and the S&P 500 chopped off 0.5% and 0.6%, respectively.

In the Dow Jones Industrial Average, Verizon Communications (VZ) and Exxon Mobil (XOM) were among the few advancers and the gains were small. Twenty-six stocks in the Dow fell, led by United Technologies (UTX) and 3M (MMM). Both were off about 2%.

In the S&P 500, gainers included retailer Dollar Tree (DLTR), up 1.5% in heavy volume; soft drink provider Monster Beverage (MNST), up 0.8% in brisk trade; and utility Southern Co. (SO), up 0.7% in moderate volume.

Southern is up 15% so far in 2019, a strong performance, especially when combined with its 4.8% annualized dividend yield.

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 25,111.18.

The projected upper bound is: 26,371.43.

The projected lower bound is: 24,696.15.

The projected closing price is: 25,533.79.

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 32 white candles and 18 black candles for a net of 14 white candles.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is 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 19.9584. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 7 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 49.54. 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 7 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 -222.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 7 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 5 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed down -200.230 at 25,473.230. Volume was 18% below average (neutral) and Bollinger Bands were 42% narrower than normal.

Open High Low Close Volume___
25,645.44925,645.44925,352.55125,473.230 289,144,128

Technical Outlook
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 25,888.22 24,736.35 25,125.80
Volatility: 9 23 20
Volume: 279,615,616 315,631,328 320,888,032

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 1.4% 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 37 periods.

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