Dow Jones Industrial Average (.DJI) has worst day since August amid coronavirus fears

Dow Jones Industrial Average (.DJI) has worst day since August amid coronavirus fears

Dow Jones Industrial Average (.DJI) has worst day since August amid coronavirus fears

The Dow Jones Industrial Average closed down 603 points, about 2%, on Friday, as the novel coronavirus outbreak has stoked uncertainty for investors.

The S&P 500 and Nasdaq also tumbled, by 1.8% and 1.6% respectively, after authorities in China said coronavirus cases there now top 9,600. The World Health Organization on Thursday declared coronavirus a public health emergency of international concern, and the U.S. on Friday declared a public health emergency and announced a temporary travel ban.

Friday’s drop capped a volatile week for financial markets, which first saw the impact of the coronavirus outbreak on Monday. After a rocky week, the Dow closed down about 290 points from the start of trading Monday. Friday was the worst day for the index since August.

Shares of Apple, which has manufacturing plants in China, also fell Friday. Shares for Starbucks, which revealed earlier this week that it closed half of its stores in China, also fell.

A number of U.S. businesses announced earlier in the week they were temporarily shuttering stores, evacuating staff and closing plants in China amid the outbreak.

Depending on the severity of the outbreak, experts predict airlines, hotels, movie theaters, restaurants and areas where people congregate will take a hit as consumers fear going out. If the outbreak worsens or lasts for an extended period of time, investors expect car, clothes, technology and other companies that rely heavily on China for manufacturing to take a hit.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 28,792.64.

The projected lower bound is: 27,728.21.

The projected closing price is: 28,260.43.

Candlesticks

A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
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 29 white candles and 21 black candles for a net of 8 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 32.3486. 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 39.40. 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 8 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 -157.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 2 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 5 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed down -603.410 at 28,256.029. Volume was 56% above average (neutral) and Bollinger Bands were 2% narrower than normal.

Open     High      Low     Close     Volume___
28,813.03928,813.03928,169.52928,256.029 403,885,472
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 28,898.88 28,435.75 27,023.18
Volatility: 16 12 15
Volume: 335,488,896 265,575,728 266,891,952

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 4.6% above 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 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 0 periods.

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