Dow Jones Industrial Average (.DJI) futures jump after White House, Senate reach deal on stimulus bill

Dow Jones Industrial Average (.DJI) futures jump after White House, Senate reach deal on stimulus bill

Dow Jones Industrial Average (.DJI) futures jump after White House, Senate reach deal on stimulus bill

Stock futures were surging again in early Wednesday morning trading, following Tuesday’s historic rally, as the White House and Senate reached a deal on a coronavirus stimulus bill.

Around 6:00 a.m. ET, futures on the Dow Jones Industrial Average pointed to a gain of more than 500 points at the Wednesday open. S&P 500 futures were up 1%. Nasdaq-100 futures were up 1.5%. Dow futures were up more than 800 points at one point in the overnight session.

The moves came after the White House and Senate leaders agreed on a massive $2 trillion coronavirus stimulus bill.

“At last we have a deal,” Republican Senate Majority Leader Mitch McConnell said around 1:37 a.m. ET from the floor of the Senate. “In effect, this is a war-time level of investment into our nation.”

Democratic Senate Minority Leader Chuck Schumer said, “This is not a moment of celebration but one of necessity.”

Ahead of the news, Dow futures had pointed to an opening drop of about 200 points, while S&P 500 and Nasdaq-100 futures also pointed to losses at the Wednesday open.

The action in the futures market followed an epic comeback on Wall Street. The Dow soared more than 2,100 points, or over 11%, notching its biggest one-day percentage gain since 1933 and its best point increase ever. The S&P 500 rallied 9.4% for its best day since October 2008.

Even with Tuesday’s massive rebound, some on Wall Street struggle to see the light at the end of the tunnel, especially without a clear sign that the coronavirus outbreak will be contained soon.

Last week, the Cboe Volatility Index (VIX), also known as Wall Street’s fear gauge, eclipsed its financial crisis high and closed at 82.69. As of Wednesday morning, it was still hovering around a still-high 60 level.

Meanwhile, the coronavirus cases in the U.S. and globally still haven’t shown a sign of peaking. More than 400,000 cases have been confirmed worldwide, including over 50,000 in the U.S., according to Johns Hopkins University. So far, more than 600 deaths related to the coronavirus have been confirmed in the U.S. New York City reported nearly 15,000 cases Tuesday and 131 related deaths.

Some investors believed the stock market was overdue for a big bounce, having priced in a worst-case scenario regarding the economic damage being done by coronavirus-related shutdowns. They believe a bounce could occur here even as coronavirus cases continue to surge because the market was so oversold.

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 25,803.49.

The projected upper bound is: 23,319.52.

The projected lower bound is: 17,765.54.

The projected closing price is: 20,542.53.

Candlesticks

A white body occurred (because prices closed higher than they opened).
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 23 white candles and 27 black candles for a net of 4 black candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 4 rising windows in the last 50 candles–this makes the current rising window even more bullish.

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 36.6025. This is not an overbought or oversold reading. The last signal was a buy 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 38.99. This is not a topping or bottoming area. However, the RSI just crossed above 30 from a bottoming formation. This is a bullish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 0 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 -53. This is not a topping or bottoming area. The last signal was a buy 0 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 22 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed up 2,112.980 at 20,704.910. Volume was 115% above average (neutral) and Bollinger Bands were 336% wider than normal.

Open     High      Low     Close     Volume___
19,722.18920,737.69919,649.25020,704.910 808,466,176
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 20,782.23 26,708.55 27,010.96
Volatility: 148 78 41
Volume: 814,243,968 476,970,016 311,438,080

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 gapped up today (bullish) 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 23.3% 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 21 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.

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