Dow Jones Industrial Average (.DJI) hits new highs on trade news
More encouraging signs that trade talks between the U.S. and China are on track kept investors in a buying mood Tuesday, nudging the major stock indexes to record highs for the second straight day.
Retailers and other companies that rely on consumer spending helped power the modest rally, which adds to the market’s solid start to the week. Only energy, banks and health care sector stocks ended with losses. Bond prices rose, sending yields lower.
Beijing said Tuesday that negotiators for both sides met and agreed to more talks. The latest development came a day after China announced new guidelines for the protection of patents and copyrights, which has been a key issue in the dispute.
Investors have grown more hopeful over trade negotiations as the world’s two largest economies continue to keep their rhetoric in check. That’s a clear difference from earlier this year, when a sharp comment from either side would seemingly silence any talks and worsen relations.
The S&P 500 index rose 6.88 points, or 0.2%, to 3,140.52. The benchmark index is on a three-day winning streak. The Dow Jones industrial average gained 55.21 points, or 0.2%, to 28,121.68.
The major stock indexes are on track for strong gains this year. The S&P 500 is up by more than 25%, while the Dow is up by more than 20%. The Nasdaq, meanwhile, is now up by more than 30%.
Surprisingly good corporate earnings, solid economic data, interest rate cuts by the Federal Reserve and more optimism on the part of investors about the prospects for a U.S.-China trade deal have helped spur the market higher since late October.
The latest signals indicating that both sides are continuing to pursue a deal have been particularly encouraging, as new U.S. tariffs are set to hit Dec. 15 on many Chinese-made items on holiday shopping checklists, such as smartphones and laptops.
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 27,351.41.
The projected upper bound is: 28,633.00.
The projected lower bound is: 27,650.80.
The projected closing price is: 28,141.90.
A white body occurred (because prices closed higher 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 27 white candles and 23 black candles for a net of 4 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 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 79.8038. 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 71.03. 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 sell 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 137.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 4 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 sell 3 period(s) ago.
Rex Takasugi – TD Profile
DJ INDU AVERG closed up 55.209 at 28,121.680. Volume was 26% above average (neutral) and Bollinger Bands were 21% 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: 27,919.18 27,144.11 26,453.80
Volatility: 7 12 15
Volume: 266,925,392 255,046,512 272,562,400
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 6.3% 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 18 periods. Our momentum oscillator is currently indicating that .DJI is currently in an overbought condition. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.
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