Dow Jones Industrial Average (.DJI) key interest rate unchanged

Dow Jones Industrial Average (.DJI) key interest rate unchanged

Dow Jones Industrial Average (.DJI) key interest rate unchanged

The Fed surprised no one by leaving its key interest rate unchanged on Thursday. Today’s status-quo Fed meeting should have had few implications for the Dow Jones industrial average and S&P 500, with no press conference and no new economic projections. But the lack of any mention of the recent stock-market correction in the post-meeting statement indicated the Fed is fine with lower stock prices.

After a huge day on Wednesday, following the midterm elections, the Dow Jones, S&P 500 index and Nasdaq composite lost ground after Thursday’s Fed meeting statement. The Dow Jones was back and forth, closing just above break-even. The S&P 500 and Nasdaq closed modestly lower, about where they were before Fed announcement. It was probably better characterized as a pause, than as a reaction to the Fed.
With the stock market recovery, the 10-year Treasury yield has recovered near a seven-year high. Meanwhile, the 2-year Treasury yield hit a new post-crisis high of 2.97% after Thursday’s Fed meeting, the highest level since 2007. The rise in short-term Treasuries has come as financial markets have priced in a December rate hike as a near sure thing. The upside surprise of 3.1% annual wage growth in the October jobs report, along with 250,000 new jobs, sealed the deal.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 26,962.25.

The projected lower bound is: 25,422.85.

The projected closing price is: 26,192.55.

Candlesticks

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.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 95.8398. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 10 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 60.15. 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 10 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 170.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 7 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 5 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERAGE closed up 10.920 at 26,191.221. Volume was 1% above average (neutral) and Bollinger Bands were 35% wider than normal.

Open High Low Close Volume___
26,139.59026,277.82026,081.90026,191.221 295,647,552

Technical Outlook
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 25,324.14 25,870.14 25,116.61
Volatility: 20 19 20
Volume: 393,922,048 324,416,640 348,270,304

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 AVERAGE is currently 4.3% above its 200-period moving average and is in an downward trend. Volatility is high 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 bearish on .DJI and have had this outlook for the last 21 periods.

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