Dow Jones Industrial Average (.DJI) Finishes Up 212, Nasdaq Rises 74

Dow Jones Industrial Average (.DJI) Finishes Up 212, Nasdaq Rises 74

Dow Jones Industrial Average (.DJI) Finishes Up 212, Nasdaq Rises 74

Stocks around the world climbed on Thursday, and U.S. indexes hit records as markets continued a rally sparked after the United States and Iran appeared to step away from the edge of war.

Money flowed into riskier investments, such as technology stocks, and trickled out of traditional hiding spots for investors when they’re nervous, such as gold. A measure of fear in the stock market had its largest drop in a week.

Stocks have been rallying since Wednesday, after investors took comments from President Donald Trump and Iranian officials to mean no military escalation is imminent in their tense conflict. It was a sharp turnaround from earlier days, when markets tumbled on the threat of war after the United States killed a top Iranian general in a drone strike.

The S&P 500 rose 21.65 points, or 0.7%, to 3,274.70 and surpassed its record set last week. The Dow Jones Industrial Average climbed 211.81 points, or 0.7%, to 28,956.90, and the Nasdaq composite rose 74.18, or 0.8%, to 9,203.43. Both also hit records.

Diminishing worries about a U.S.-Iran war put more of the market’s focus on the economy, corporate profits and other inputs that directly affect stock prices.

“The market is in pretty solid shape,” said Matt Hanna, portfolio manager at Summit Global Investments. “We could see some volatility in the beginning of 2020” following a well-worn path of choppy first halves for stocks during presidential election years, “but we don’t see any sort of recession on the horizon.”

Across markets, worries about a recession have faded since last year as central banks cut interest rates and pumped stimulus into the global economy. The United States and China also moved toward an interim deal in their trade war. China confirmed on Thursday that its chief envoy in tariff talks with Washington will visit next week to sign their “Phase 1” trade deal.

The spotlight will move next to Friday’s labor report, and economists expect it to show employers added 160,000 jobs last month. They also forecast the unemployment rate to hold at its low level of 3.5%. The numbers are key because a strong job market has been propping up the economy and allowing U.S. households to continue to spend, even as manufacturing weakens due to tariffs and trade wars.

Technology stocks powered to the biggest gains in the S&P 500 and accounted for more than a third of the index’s gain. Apple’s 2.1% rise added momentum, and Advanced Micro Devices rose 2.4% for one of the larger gains in the S&P 500.

On the losing end were shares of several big retailers. Kohl’s fell 6.5% for the largest loss in the S&P 500 after it reported weaker sales during the holiday season versus a year earlier. Bed Bath & Beyond plunged 19.2% after its results for the latest quarter fell well short of analysts’ expectations.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 27,996.67.

The projected upper bound is: 29,408.57.

The projected lower bound is: 28,579.88.

The projected closing price is: 28,994.22.

Candlesticks

A white body occurred (because prices closed higher 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 31 white candles and 19 black candles for a net of 12 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 70.5274. This is not an overbought or oversold reading. 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 67.38. 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 4 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 218.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 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 buy 0 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed up 211.811 at 28,956.900. Volume was 13% above average (neutral) and Bollinger Bands were 16% narrower than normal.

Open     High      Low     Close     Volume___
28,851.97128,988.01028,844.31128,956.900 282,850,656
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 28,676.00 28,024.90 26,817.13
Volatility: 11 9 14
Volume: 232,097,648 249,916,192 263,051,984

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 8.0% 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 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 19 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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