Dow Jones Industrial Average (.DJI) futures point to more than 200 point opening gain following Monday’s sharp rebound

Dow Jones Industrial Average (.DJI) futures point to more than 200 point opening gain following Monday’s sharp rebound

Dow Jones Industrial Average (.DJI) futures point to more than 200 point opening gain following Monday’s sharp rebound

Stock futures pointed to a Tuesday opening jump in early morning trade, following a steep rebound in the previous session.

Futures for the Dow Jones Industrial Average jumped 309 points, pointing to a gain of about 239 points at Tuesday’s open. S&P 500 futures and Nasdaq futures also pointed to opening gains for the two indexes on Tuesday. Stocks surged on Monday as a slew of coronavirus headlines pointed to a potential stabilization in the U.S. The Dow soared 1,600 points, posting its third biggest point gain ever. The S&P 500 jumped 7% to its highest level since March 13. With Monday’s rally, the S&P 500 bounced about 20% from its 52-week low on March 23. 

President Donald Trump said in a press conference Monday there’s “tremendous light at the end of the tunnel’ with ten different therapeutic agents in active trials. Trump echoed comments by World Health Organization officials who said the research to develop vaccines and treatments has “accelerated at incredible speed.”

Investors were soothed by data over the weekend that shows a slowing in the number of daily U.S. coronavirus cases, although it is still early to determine a lasting trend. Death tolls in some of the world’s coronavirus hot spots, including Spain and Italy, showed signs of easing. New York state, the hardest-hit region in the U.S., also reported its first decline in daily confirmed deaths on Sunday.

Dow futures point to more than 200 point opening gain following Monday’s sharp rebound

© Dow futures point to more than 200 point opening gain following Monday’s sharp rebound Dow futures point to more than 200 point opening gain following Monday’s sharp rebound

“The apex in New York state is likely imminent as opposed to one month out,” Marko Kolanovic, JPMorgan’s global head of macro quantitative and derivatives strategy, said in a note on Monday. “Big data indicated very early on that social distancing is working overall.”

Amid Monday’s rally, Wall Street’s fear gauge the Cboe Volatility Index fell 3.3% to 45.24, the lowest level in about two weeks. Three weeks ago, the VIX hit a record high of 82.69, surpassing the peak level during the financial crisis. Still, the cases in the U.S., the world’s most affected country, topped 347,000 with at least 10,000 deaths, according to data from Johns Hopkins University. 

“We still believe that the odds are quite high that the lows from March will be retested and probably undercut before this bear market comes to an end,” Matt Maley, chief market strategist at Miller Tabak, said in a note on Monday. 

Stocks are still in bear-market territory with the S&P 500 about 21.5% off its record high. Many on Wall Street believe stocks haven’t fully priced in the potential corporate earnings collapse as the coronavirus outbreak have virtually shut down the global economy.

Technical Indicators

Overall, the bias in prices is: Downwards.

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

The projected upper bound is: 25,575.47.

The projected lower bound is: 19,532.12.

The projected closing price is: 22,553.79.

Candlesticks

A white body occurred (because prices closed higher 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 22 white candles and 28 black candles for a net of 6 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 53.0932. This is not an overbought or oversold reading. The last signal was a sell 4 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 49.66. 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 9 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 102.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 9 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 7 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed up 1,627.461 at 22,679.990. Volume was 50% above average (neutral) and Bollinger Bands were 78% wider than normal.

Open     High      Low     Close     Volume___
21,693.63122,783.44921,693.63122,679.990 614,200,960
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 21,642.85 25,381.92 26,808.84
Volatility: 93 85 45
Volume: 614,609,152 529,670,208 327,426,368

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 15.4% below its 200-period moving average and is in an downward trend. Volatility is high 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 bearish on .DJI and have had this outlook for the last 30 periods.

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