Dow Jones Industrial Average (.DJI) faces worrisome headwinds from Caterpillar and Boeing
The Dow Jones Industrial Average continues to slaughter all challengers, swatting away trade war concerns, recession alarms, and Trump administration turmoil as if they were flies on a window.
However, Deutsche Bank warns that one key index component threatens to cripple the stock market bellwether as it seeks to ascend to new all-time highs.
There’s also the looming threat of the seemingly never-ending US-China trade war, whose associated tariffs disproportionately impact Caterpillar and hike its manufacturing costs.
Optimism remains high that the US and China will strike a trade deal sooner rather than later, but critics warn that any more near-term hiccups could prolong the negotiations as far out as June – a full three months after President Trump’s original deadline.
Caterpillar is the 10th most heavily-weighted stock in the Dow 30, accounting for 3.63 percent of the index. Given that the Dow’s largest component – Boeing – is already under severe pressure from other factors, the index could face considerable headwinds if Dillard’s ominous prediction proves correct.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 26,766.32.
The projected lower bound is: 25,742.48.
The projected closing price is: 26,254.40.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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 92.2090. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 10 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 62.87. 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 26 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 137.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 16 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 buy 2 period(s) ago.
Rex Takasugi – TD Profile
DJ INDU AVERG closed up 39.000 at 26,218.131. Volume was 19% below average (neutral) and Bollinger Bands were 52% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 25,856.68 25,566.49 25,206.92
Volatility: 15 13 20
Volume: 295,660,128 309,677,728 318,338,208
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 is currently 4.0% above its 200-period moving average and is in an upward trend. Volatility is Our volume indicators reflect moderate flows of volume into .DJI (mildly bullish). Our trend forecasting oscillators are currently bullish on .DJI and have had this outlook for the last 0 periods.
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