Dow Jones Industrial Average (.DJI) down 81 points on losses for Visa, Microsoft shares

Dow Jones Industrial Average (.DJI) down 81 points on losses for Visa, Microsoft shares

Wall Street retreated on Monday as disappointing U.S. economic data and fresh trade worries dampened investor risk appetite.

All three major U.S. stock averages began the last month of the year in the red, pulling back from last week’s record highs.

“It’s a quiet day as investors recover from Thanksgiving. As investors settle back at their desks,” said David Carter, chief investment officer at Lenox Wealth Advisors in New York.

A report from the Institute for Supply Management (ISM) showed U.S. manufacturing activity contracted in November for the fourth consecutive month, fueling worries that the longest period of economic expansion in U.S. history could be growing short-winded.

Earlier, President Donald Trump tweeted that he would restore tariffs on steel imported from Brazil and Argentina, boosting shares of U.S. steel makers U.S. Steel Corp and AK Steel Holding Corp by 3.5% and 5.6%, respectively.

Still, it was the latest sign that the hydra-headed trade disputes between the United States and its trading partners will continue to rattle markets and hinder global economic growth.

The news comes on the heels of recent Wall Street highs, driven to new records last week on hopes of an imminent “phase one” trade deal between the U.S. and China.

Indeed, a senior adviser to Trump said on Monday it was still possible that a deal with China could be reached by year-end.

“Markets have had a great run this year and expectations are already high that a trade deal gets done,” Carter added. “Any reversal here is likely to negatively impact markets, which is likely what we’re seeing today.”

“The most recent tariff tweet has reminded markets that there’s a lot of uncertainty around trade policy and U.S. actions,” said Carter.

The Dow Jones Industrial Average fell 187.67 points, or 0.67%, to 27,863.74, the S&P 500 lost 19.4 points, or 0.62%, to 3,121.58 and the Nasdaq Composite dropped 82.29 points, or 0.95%, to 8,583.18.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 28,302.51.

The projected lower bound is: 27,297.49.

The projected closing price is: 27,800.00.

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 5 white candles and 5 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.

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 58.2253. This is not an overbought or oversold reading. The last signal was a sell 0 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 54.51. 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 1 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 -10. 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 sell 6 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed down -268.371 at 27,783.039. Volume was 9% below average (neutral) and Bollinger Bands were 42% narrower than normal.

Open     High      Low     Close     Volume___
28,109.74028,109.84027,782.35027,783.039 236,605,008
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 27,961.98 27,200.54 26,489.46
Volatility: 9 12 14
Volume: 235,543,200 247,357,776 270,825,312

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 4.9% 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 21 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.

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