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Dow Jones Industrial Average (.DJI) Lags S&P 500, Nasdaq

Dow Jones Industrial Average (.DJI) Lags S&P 500, Nasdaq

All of Wall Street’s major indexes reported gains Monday afternoon, mirroring a positive pre-market for Dow futures. The broad S&P 500 Index of large-cap stocks rose 0.3% to 2,985.80, with technology shares leading the way.

A strong performance in the technology sector propelled the Nasdaq Composite Index sharply higher. The index was up 0.7% at 8,204.74 at 2:59 pm ET.

The Dow Jones Industrial Average was a notable underperformer, gaining just 6.35 points, or 0.02%, to 27,160.55. Shares of Verizon were down more than 2%. Three other companies reported losses of at least 1.3%.

U.S. Economy Stabilizes

The U.S. economy appears to have regained its footing after a dismal start to the second quarter, according to the Federal Reserve Bank of Chicago’s National Activity Index (CFNAI).

CFNAI, which tracks overall economic output using 85 monthly indicators, came in at -0.02 in June versus -0.03 the previous month. On the CFNAI scale, zero represents trend growth and figures below that level suggest the U.S. economy is expanding below the long-running average. However, at -0.02, the indicator suggests that economic output is more or less on par with the historic average. The indicator plunged to -0.73 in April.

The second quarter was a turbulent period for the U.S. economy, with key metrics on consumer spending, manufacturing and trade declining. Compared to the first quarter, U.S. economic output was likely cut in half between April and June, according to the Atlanta Fed’s GDP Tracker.

Economists at the Commerce Department will release their preliminary estimate of second-quarter GDP on Friday. The consensus forecast on Wall Street calls for annual growth of 1.8%, which is higher than the Atlanta Fed’s 1.6% estimate.

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 26,489.50.

The projected upper bound is: 27,753.38.

The projected lower bound is: 26,644.16.

The projected closing price is: 27,198.77.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white 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 34.6280. This is not an overbought or oversold reading. The last signal was a sell 2 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 65.20. 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 sell 3 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 36. This is not a topping or bottoming area. The last signal was a sell 3 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 sell 0 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed up 17.701 at 27,171.900. Volume was 19% below average (neutral) and Bollinger Bands were 11% narrower than normal.

Open High Low Close Volume___
27,174.18027,227.77027,088.90027,171.900 226,949,936

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period     50-period     200-period
Close: 27,152.75 26,237.42 25,510.34
Volatility: 8 14 20
Volume: 228,297,424 263,656,320 317,842,080

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 6.5% 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 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 27 periods.

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