Dow Jones Industrial Average (.DJI) in Focus

Dow Jones Industrial Average (.DJI) in Focus

Dow Jones Industrial Average (.DJI) in Focus

The U.S. stock indexes are at a crossroads. The Dow Jones index (DJIA) seems to be the best picture of the current stock market situation.

The key price of DJIA is 23775, and it is important whether the index falls below this line. If the index rebound strongly and sharply above 27400, it will be a positive sign. If not, it would become  very dark markets and such a phase is likely to last long. It would not be a good choice to enter the market at this point.

People are talking about coronavirus, trade war, and oil war…. In my opinion, the key is dollar (USD). As we all know, the amount of U.S. debt is too large for the U.S. they are driving hard toward negative interest rates and are spinning the money-printing machines at full capacity. The key is US dollar, and we should watch the dollar.

Shayne Heffernan Trade Idea

“A recent survey by the University of Michigan, the school behind the all-important consumer sentiment report, indicates that a majority of American consumers believe the coronavirus isn’t a permanent situation (it’s not) and while the survey indicates gloominess about the near-term state of affairs, it also shows consumers see a rebound coming when the virus abates.”

“Based on the early price action and the current price at 23891, the direction of the June E-mini Dow Jones Industrial Average on Monday is likely to be determined by trader reaction to the 50% level at 23796 and the Fibonacci level at 23571.” “We are not long term buyers until July August” Shayne Heffernan PhD in Economics

Why This Matters

New York Governor Anderw Cuomo told reporters in Albany Sunday that a phased re-opening of the state’s economy could come as early as May 15, while other states around the country have either eased certain outdoor activity restrictions or set out plans for the gradual re-start of jobs, businesses and public schools.

The modestly positive movement belies data that still suggests coronavirus cases are accelerating — 27,600 alone were reported in the U.S. on Sunday, taking the cumulative total to just over 930,000 — and the fact that a vaccine is still likely many months away.

Still, with several European countries gingerly lifting ‘stay-at-home’ restrictions, and governments and central banks around the world still providing trillions in liquidity and fiscal support, stocks look set to start the week on a solid footing.

Futures contracts tied to the Dow Jones Industrial Average, which has gained 8.5% so far this month, suggest a 205 point opening bell gain for the 30-stock average while those linked to the S&P 500 are guiding to a 25 point advance for the broader benchmark.

Corporate earnings are likely to be in focus again this week, alongside the grim calculation of coronavirus death and infection rates, with some 169 S&P 500 companies expected to report quarterly profits this week, including heavyweights such as Apple , Microsoft , Amazon and Facebook .

First quarter earnings, however, are still on pace to decline around 14.8% from last year, according to Refinitiv, with a another 33.3% contraction forecast for the three months ending in June.

This is a big week as far as economic data, central bank decisions and earnings are concerned. Around 173 companies in the S&P 500 will report earnings this week, including Dow components Apple, Microsoft and Caterpillar.

Technical Indicators

Overall, the bias in prices is: Downwards.

The projected upper bound is: 26,732.55.

The projected lower bound is: 20,586.94.

The projected closing price is: 23,659.75.

Candlesticks

A white body occurred (because prices closed higher than they opened).
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 21 white candles and 29 black candles for a net of 8 black 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 50.9176. 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 53.35. 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 22 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 48. This is not a topping or bottoming area. The last signal was a sell 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 20 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed up 260.010 at 23,775.270. Volume was 14% below average (neutral) and Bollinger Bands were 1% narrower than normal.

Open         High        Low          Close        Volume
23,628.240   23,826.000  23,417.680   23,775.270   379,306,816
Technical Outlook
Short Term:         Neutral
Intermediate Term:  Bullish
Long Term:          Bearish
Moving Averages: 10-period        50-period         200-period
Close:           23,606.07        23,975.40         26,600.67
Volatility:      37               87                46
Volume:          437,983,584      568,099,136       339,989,088

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 10.6% below 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 volume flowing into and out of .DJI at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .DJI and have had this outlook for the last 10 periods.

Get the components of the Dow Jones Industrial Average (^DJI) to help your investment decision from Live Trading News.

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