Dow Jones Industrial Average (.DJI) futures stage ugly u-turn after worst plunge in nine years for retail sales
Stock-market ebullience over progress in U.S.-China trade talks on Thursday gave way to pessimism after a December report on retail sales showed the worst decline in about nine years, sparking recessionary fears. Futures for the Dow Jones Industrial Average DJIA, -0.41% YMH9, -0.52% turned firmly negative, after showing a triple-digit gain.
Most recently, Dow futures were down 100 points, or about 0.4%, at 25,398. Meanwhile, futures for the S&P 500 ESH9, -0.45% SPX, -0.27% were off 10.35 points, or 0.4%, at 2,739.75, while those for the Nasdaq-100 were down 0.4% at 6,991. Retail sales sank 1.2% in December, the U.S. Census Bureau said Thursday. It’s the largest drop since September 2009, a few months after the end of the Great Recession.
The market had been set for gains on optimism over progress between China and the U.S. as reports indicated that Chinese President Xi Jinping would meet with Treasury Secretary Steven Mnuchin and top trade negotiator Robert Lighthizer on Friday, as the countries attempt to resolve longstanding trade differences that have roiled markets. The retail sales report is likely to weigh on the government’s official scorecard for the economy known as gross domestic product, with fears of a recession looming.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 24,667.30.
The projected upper bound is: 26,459.60.
The projected lower bound is: 24,415.22.
The projected closing price is: 25,437.41.
A black body occurred (because prices closed lower 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.
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 85.3301. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 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 63.53. 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 34 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 94. This is not a topping or bottoming area. The last signal was a sell 0 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 30 period(s) ago.
Rex Takasugi – TD Profile
DJ INDU AVERG closed down -103.879 at 25,439.391. Volume was 14% below average (neutral) and Bollinger Bands were 35% 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: 25,284.25 24,249.23 25,027.75
Volatility: 12 28 20
Volume: 286,870,016 363,188,928 323,776,576
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 1.6% 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 23 periods.