Dow Jones Industrial Average (.DJI) hit records again before closing little changed

Dow Jones Industrial Average (.DJI) hit records again before closing little changed

Dow Jones Industrial Average (.DJI) hit records again before closing little changed

Stocks hit record highs Monday before closing little changed as investors assessed mixed signals around U.S.-China trade talks.

The Dow ended the day up just 31 points. The S&P 500 advanced 0.05%, while the Nasdaq closed 0.11% higher. Disney was the best-performing Dow stock, rising 2%. Real estate and consumer staples both gained at least 0.6% to lead the S&P 500 higher.

However, the major averages failed to post significant gains after CNBC’s Eunice Yoon reported, citing a government source, that Chinese officials are pessimistic about the prospect of a U.S.-China trade deal. China is troubled by President Donald Trump saying recently the U.S. would not roll back tariffs as they thought both sides had agreed to do so in principle, Yoon reports.

The news triggered a move into traditional haven assets. The benchmark 10-year Treasury yield fell from around 1.85% earlier in the day to 1.8%. Gold futures erased earlier losses to settle 0.2% higher at $1,471.90 per ounce.

That report came after Chinese state media said over the weekend China and the U.S. had “constructive” trade talks, noting U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin talked with Chinese Vice Premier Liu He about the core issues for a phase one trade agreement.

The so-called phase one deal was announced last month and is expected to be signed sometime this month. The optimism around that agreement, coupled with easier monetary policy from the Federal Reserve, helped spark the stock market’s rally to record highs.

“The stock market has shown remarkable resiliency,” Robert Pavlik, a chief investment strategist at SlateStone Wealth, said in a note. “What is more remarkable is that the issues that the market has been dealing with since the start of the year haven’t dissipated but have been grown or become more complicated.”

Pavlik pointed out that the U.S.-China trade conflict, which began last year, remains an overhang for the market while corporate earnings have not improved and economic news has weakened.

Over the past month, the Dow and S&P 500 are both up more than 4%. The Nasdaq, meanwhile, is up 5.8% in that time. The Dow also closed above 28,000 for the first time on Friday.

Ilya Feygin, a senior strategist at WallachBeth Capital, noted stocks might be getting a boost thanks to investors’ fear or missing out on the current rally.

“The market has been driven in recent weeks by people getting back their S&P 500 and Dow exposure,” he said. “We saw about $9.5 billion in net inflows into U.S. equity ETFs, and we’ve had a lot of weeks like that lately. A lot of people were caught cautious and have been forced to put money to work at higher levels.”

In corporate news, Coty shares gained more than 2% after the company announced it took a 51% stake in Kylie Cosmetics, Kylie Jenner’s makeup company.

Technical Indicators

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 27,240.88.

The projected upper bound is: 28,550.64.

The projected lower bound is: 27,569.83.

The projected closing price is: 28,060.23.

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 28 white candles and 22 black candles for a net of 6 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is 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 97.6263. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 5 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 76.25. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 73 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 134.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 5 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 25 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed up 31.330 at 28,036.221. Volume was 3% below average (neutral) and Bollinger Bands were 10% wider than normal.

Open     High      Low     Close     Volume___
27,993.22128,040.97127,969.24028,036.221 252,323,344
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 27,733.09 27,045.13 26,373.66
Volatility: 5 12 15
Volume: 256,538,352 255,113,872 272,942,720

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 6.3% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 12 periods. Our momentum oscillator is currently indicating that .DJI is currently in an overbought condition.

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