Dow Jones Industrial Average (.DJI) digested a weaker-than-expected fourth-quarter earnings report from JPMorgan Chase & Co.

Dow Jones Industrial Average (.DJI) digested a weaker-than-expected fourth-quarter earnings report from JPMorgan Chase & Co.

Dow Jones Industrial Average (.DJI) digested a weaker-than-expected fourth-quarter earnings report from JPMorgan Chase & Co.

Stocks traded higher on Tuesday, Jan. 15, as Wall Street digested a weaker-than-expected fourth-quarter earnings report from JPMorgan Chase & Co.

The Dow rose 156 points, or 0.65%, to 24,066, the S&P 500 gained 1.07%, and the Nasdaq rose 1.7% as Netflix Inc surged following a price hike at the streaming service. 

Equities also got a lift from signals from China that suggested the prospect of further stimulus for the world’s second-largest economy.

China’s National Development and Reform Commission, a key government division, said it aimed to create a “good start” for the economy over the first few months of the year, raising hopes that planned stimulus, including tax cuts and liquidity support equal to around $220 billion, could be deployed in order to halt the slowest pace of growth in nearly a decade.

The partial shutdown of the U.S. government entered its 25th day on Tuesday, and a CNBC report said the Trump administration now estimates that the cost of the government shutdown will be twice as steep as originally forecast.

The original estimate that the partial shutdown would subtract 0.1 percentage point from growth every two weeks now has been doubled to a 0.1 percentage point subtraction every week, CNBC reported, citing an an official who asked not to be named.

JPMorgan Chase & Co reported fourth-quarter earnings of $1.98 a share, missing estimates of $2.20 by a wide margin. It was the bank’s first profit miss in four years as trading revenue fell short of expectations and costs rose for loan-loss reserves.

Net income rose 67% to $7.07 billion, benefiting from the 2017 tax cuts and rebounding from a big write-down taken a year earlier.

Net revenue rose 7% from a year earlier to $26.1 billion, JPMorgan said, less than estimated, however, by analysts at the brokerage firm Keefe, Bruyette & Woods. Volatile markets in the fourth quarter took a toll on bond trading and commodities, partially offset by strength in emerging markets, the bank said.

Revenue in the bond-trading division fell 16% to $1.9 billion, a bigger drop than the 10% predicted by the KBW analysts. Stock-trading revenue rose 15% to $1.3 billion.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 25,164.06.

The projected lower bound is: 22,925.11.

The projected closing price is: 24,044.59.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 9 white candles and 1 black candles for a net of 8 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.

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 89.8004. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 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 53.57. 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 13 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 96. This is not a topping or bottoming area. The last signal was a sell 1 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 9 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed up 155.750 at 24,065.590. Volume was 17% below average (neutral) and Bollinger Bands were 14% wider than normal.

Open High Low Close Volume___
23,914.10924,099.14123,887.93024,065.590 291,574,848

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

Moving Averages: 10-period 50-period 200-period
Close: 23,663.68 24,387.49 24,962.10
Volatility: 27 30 20
Volume: 328,794,848 372,329,184 330,249,536

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 3.6% below its 200-period moving average and is in an upward 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 bullish on .DJI and have had this outlook for the last 2 periods.

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