Dow Jones Industrial Average (.DJI) logs longest win streak in 8 weeks
The Dow booked its fourth gain in a row on Monday but the broader market notched slight losses as investors looked ahead to European Central Bank and the Federal Reserve monetary policy moves, with both central banks expected to reveal easier-money initiatives in coming days amid mixed global economic data and an uncertain future for U.S.-China trade relations.
How are the major benchmarks performing?
The Dow Jones Industrial Average DJIA, +0.14% rose 38.05 points, or 0.1%, to 26,835.51, recording its fourth straight gain, matching a similar win streak ended July 15. Meanwhile, the S&P 500 index SPX, -0.01% lost less than a point, or 0.01%, to 2,978.43, and the Nasdaq Composite Index COMP, -0.19% shed 15.64 points, or 0.2%, to 8,087.44.
At session highs, the Dow rose 103.37 points, or 0.4%, the S&P was up 9.36 points, also 0.3% and the Nasdaq added 48.2 points, or 0.6%.
What’s driving the market?
U.S. stocks saw choppy trade Monday as investors weighed Beijing and Washington’s plan to renew talks next month, and as investors anticipated stimulus from global central banks.
“There’s a belief that there will be a meeting [between the U.S. and China] sometime in October, though we don’t have a date or agenda yet,” Randy Frederick, vice president of trading and derivatives at the Schwab Center for Financial Research told MarketWatch.
“It’s a fairly thin proposition,” Frederick said, adding that given the apparent differences in negotiating positions between the U.S. and China, “I’m having a difficult time imagining a real trade agreement.”
He said that while hopes for further monetary stimulus may be boosting confidence among some investors, but “the fact that we’re this close to an all time high puts us in a dangerous situation and makes the market vulnerable to a pullback.”
The European Central Bank is widely expected to deliver a further rate cut, pushing its deposit rate further into negative territory, when policy makers meet Thursday. The ECB may also move to restart a bond-buying program it ended in December as it responds to a slowing economy and stubbornly below-target inflation.
Expectations for more stimulus were high even as German exports unexpectedly rose in July, following a run of downbeat economic data out of Europe’s largest economy.
In addition, Fed policy makers meet next week, with recent data, including last Friday’s weaker-than-expected jobs report, seen underlining expectations it will move to cut its key lending rate.
Last week’s renewed trade optimism appeared to spill over to Monday, following a report over the weekend that Chinese officials had offered to buy agricultural goods in exchange for concessions related to Huawei Technologies Co. or a delay of tariffs set to go into effect in October and December.
U.S. Treasury Secretary Steven Mnuchin said Monday on Fox Business Network that China’s decision to meet for talks next month is a sign of “good faith,’ but that the administration is willing to continue with its tariff policy unless a good deal for U.S. companies and workers can be struck.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 27,625.40.
The projected lower bound is: 26,057.98.
The projected closing price is: 26,841.69.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 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.
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 91.1059. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 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 58.61. 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 23 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 142.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 buy 12 period(s) ago.
Rex Takasugi – TD Profile
DJ INDU AVERG closed up 38.049 at 26,835.510. Volume was 1% above average (neutral) and Bollinger Bands were 2% wider 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: 26,331.30 26,573.55 25,656.23
Volatility: 15 19 20
Volume: 229,008,304 263,455,440 302,247,520
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 4.6% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. 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 1 periods.
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