Dow Jones Industrial Average (.DJI) investors grew hopeful that the United States and China would hammer out an agreement
Wall Street has rallied on Friday, with the Dow and the Nasdaq posting their eighth consecutive weekly gains, as investors grew hopeful that the United States and China would hammer out an agreement resolving their protracted trade war.
All three major US indexes ended the session higher, and for the fourth straight session, the S&P 500 held above its 200-day moving average, a key technical level.
Talks between the United States and China will resume in Washington next week, with both sides saying progress has been made toward resolving the two countries’ contentious trade dispute.
Tariff-vulnerable industrials provided the biggest lift to the blue-chip Dow, led by bellwethers Boeing Co, 3M Co , United Technologies Inc and Caterpillar Inc.
“This may be just false hope with the tariff situation as thorny details still need to be agreed upon,” said David Carter, chief investment officer at Lenox Wealth Advisors in New York. “It’s good news but its not over yet.”
Indeed, the trade row’s effects were reflected in Deere & Co’s earnings report, which came in below analyst estimates in part because of slowing international trade. The agricultural equipment manufacturer’s shares fell 2.1 per cent.
“Solving the trade issue could give global growth the boost it needs,” Carter added. “Absent a tariff solution, growth will continue to slow.”
With nearly 80 per cent of S&P 500 companies having reported, fourth-quarter earnings season is largely in the rear view mirror. Analysts now see a profit increase of 16.2 per cent for the quarter, according to Refinitiv data.
Going forward, however, the outlook continues to worsen. First quarter earnings are currently seen falling by 0.5 per cent, the first year-on-year decline since mid-2016.
The Dow Jones Industrial Average rose 443.86 points, or 1.74 per cent, to 25,883.25, the S&P 500 gained 29.87 points, or 1.09 per cent, to 2,775.6 and the Nasdaq Composite added 45.46 points, or 0.61 per cent, to 7,472.41.
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 24,705.70.
The projected upper bound is: 26,916.58.
The projected lower bound is: 24,852.19.
The projected closing price is: 25,884.39.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
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 31 white candles and 19 black candles for a net of 12 white candles.
A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 6 rising windows in the last 50 candles–this makes the current rising window even more 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 88.5738. 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 69.43. 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 35 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 164.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 1 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 buy 31 period(s) ago.
Rex Takasugi – TD Profile
DJ INDU AVERG closed up 443.859 at 25,883.250. Volume was 10% below average (neutral) and Bollinger Bands were 31% 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: 25,366.18 24,250.37 25,036.67
Volatility: 15 28 20
Volume: 282,513,568 361,989,792 323,518,880
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 gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
DJ INDU AVERG is currently 3.4% above its 200-period moving average and is in an upward 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 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 24 periods.