Dow Jones Industrial Average (.DJI) gaining for the sixth session in a row, as investors continued to snap up global equities

Dow Jones Industrial Average (.DJI) gaining for the sixth session in a row, as investors continued to snap up global equities

Dow Jones Industrial Average (.DJI) gaining for the sixth session in a row, as investors continued to snap up global equities

U.S. stocks closed higher Monday, with the Dow gaining for the sixth session in a row, as investors continued to snap up global equities after the U.S. dropped plans to impose tariffs on Mexico.

How did the benchmarks fare?

The Dow Jones Industrial Average DJIA, +0.30% rose 78.74 points, or 0.3%, to 26,062.68, marking its longest winning streak since May 2018. The S&P 500 SPX, +0.47% added 13.39 points, or 0.5%, to 2,886.73, and the Nasdaq Composite index COMP, +1.05% climbed 81.07 points, or 1.1%, to 7,823.17.

What drove the market?

President Donald Trump late Friday tweeted that he had suspended plans to impose tariffs on Mexico after reaching a deal with that country over stemming the flow of illegal immigration. But he warned Mexico in a series of tweets on Sunday that if cooperation should fail, “We can always go back to our previous, very profitable, position of tariffs.”

However, there were questions about how much of the deal is really new, particularly as Mexico had previously agreed to deploy its National Guard to its southern border with Guatemala as well as accept the return of asylum-seekers as they wait out their cases.

As global equities rose, the Mexican peso USDMXN, -0.1343%  rallied against the U.S. dollar.

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 25,661.47.

The projected upper bound is: 26,670.18.

The projected lower bound is: 25,468.99.

The projected closing price is: 26,069.58.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.

An inverted hammer occurred. If this occurs during a downtrend it implies a reversal. Look for a confirmation of the reversal on the bar.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

A shooting star occurred (a shooting star has a small real body near the bottom of the candle and a long upper shadow). During an uptrend(which appears to be the case with DJ INDU AVERG) the long upper shadow indicates that the bears are gaining control and a top may occur.

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 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 91.5849. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 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 57.95. 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 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 136.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 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 buy 2 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed up 78.740 at 26,062.680. Volume was 15% below average (neutral) and Bollinger Bands were 10% wider than normal.

Open High Low Close Volume___
26,090.22126,210.60926,054.31126,062.680 249,276,192

Technical Outlook
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 25,391.79 26,004.12 25,429.07
Volatility: 19 15 20
Volume: 280,418,912 283,044,256 319,235,520

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 2.5% above 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 22 periods.

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