Dow Jones Industrial Average (.DJI) dives, Donald Trump sees the U.S. economy as his ticket to re-election and his Trump card in the China trade war
The Trump economy may be the greatest in history, according to the tweeter in chief. President Donald Trump sees the U.S. economy as his ticket to re-election and his Trump card in the China trade war. Yet there already are some indications that this may be a gigantic miscalculation. Thursday’s stock market sell-off showed that Trump’s Dow Jones bragging rights are in jeopardy. But there’s much more, including a sudden slowing of federal tax withholdings.
Will Dow Jones Weigh On The Trump Economy?
In Thursday stock market trading, the Dow Jones tumbled 286 points, or 1.1%. The S&P 500 fell 1.2%, while the Nasdaq slid 1.6%. Since Trump’s May 5 tweets set the course for an escalation of the China trade war, the Dow Jones has fallen more than 1,000 points to 25,490.
While most Americans don’t alter purchasing behavior based on the ebb and flows of the stock market, lower stock prices hurt sentiment and tighten financial conditions for raising new funds.
With the tax-cut stimulus fading and the U.S. economy slowing back to trend growth, lower stock prices could further dampen growth and lead the unemployment rate to begin to tick higher. A spell of two years with flat or lower stock prices would begin to put the screws in public pension funds and state budgets.
Already, the Dow Jones is up only about 2% since Trump signed the tax cuts into law in December 2017. If Trump follows through on his threat to hit all Chinese imports with 25% tariffs, the China trade war could mean a “Long March” for the stock market.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 26,036.43.
The projected lower bound is: 24,936.02.
The projected closing price is: 25,486.22.
A black body occurred (because prices closed lower 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 falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 4 falling windows in the last 50 candles–this makes the current falling window even more bearish.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 55.9457. This is not an overbought or oversold reading. The last signal was a sell 21 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 38.93. 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 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 -104.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 6 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 19 period(s) ago.
Rex Takasugi – TD Profile
DJ INDU AVERG closed down -286.139 at 25,490.471. Volume was 5% above average (neutral) and Bollinger Bands were 14% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 25,689.84 26,075.81 25,434.03
Volatility: 19 14 20
Volume: 292,193,600 297,425,376 318,002,400
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.
DJ INDU AVERG gapped down today (bearish) 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 0.2% 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 11 periods.