Dow Jones Industrial Average (.DJI) fell 800 points on Wednesday, its biggest one-day fall this year

Dow Jones Industrial Average (.DJI) fell 800 points on Wednesday, its biggest one-day fall this year

Dow Jones Industrial Average (.DJI) fell 800 points on Wednesday, its biggest one-day fall this year

The Dow Jones Industrial Average fell 800 points on Wednesday, its biggest one-day fall this year, after data showed world economic growth slowing further, undermined by President Trump’s trade protectionism, leading the U.S. Treasury yield curve to invert and flash a recession warning signal.

All 30 stocks in Dow Jones Industrial Average closed lower for only the third time this year, and all eleven sector indexes in the S&P 500 ended lower, reversing gains notched Tuesday when the Trump administration said it would delay the imposition of some new tariffs on Chinese goods.

But there are still “structural issues” the U.S. needs to settle with China through negotiations, White House trade advisor Peter Navarro told Fox News on Wednesday. These issues include cyber intrusion into U.S. business networks, forced technology transfer, intellectual property theft and currency manipulation, he added.

Navarro and Trump both blamed the Federal Reserve for slowing economic growth and the fall in stocks. “This is basically the Federal Reserve’s problem,” Navarro said. “They are causing this because when Jay Powell got in as chairman he proceeded to rein in interest rates by 100 points, too far too fast. Even though the Trump economy is rock solid, it slowed us down a bit because of those higher interest rates.”

Technical Indicators

Overall, the bias in prices is: Downwards.

The projected upper bound is: 26,167.76.

The projected lower bound is: 24,796.97.

The projected closing price is: 25,482.37.

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 4 white candles and 6 black candles for a net of 2 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
Review of DJ INDU AVERG (.DJI)
as of 8/14/2019

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 45.0895. This is not an overbought or oversold reading. The last signal was a buy 6 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 33.91. 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 6 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 -105.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 4 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 17 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed down -800.490 at 25,479.420. Volume was 29% above average (neutral) and Bollinger Bands were 73% wider than normal.

Open     High      Low     Close     Volume___
26,035.08026,035.08025,471.59025,479.420 357,003,328
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 26,115.51 26,603.35 25,584.95
Volatility: 30 17 20
Volume: 321,536,320 268,383,136 313,503,136

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 0.4% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume out of .DJI (mildly bearish). Our trend forecasting oscillators are currently bearish on .DJI and have had this outlook for the last 11 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.

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