Dow Jones Industrial Average (.DJI) looks set for a positive open

Dow Jones Industrial Average (.DJI) looks set for a positive open

Dow Jones Industrial Average (.DJI) looks set for a positive open

Global stocks traded lower across the board Thursday, although U.S. stocks look set for a positive open, as investors reacted to a series of moves by President Donald Trump, including the blacklisting of China’s Huawei Technologies from doing business with the United States, that underscored the breadth of his myriad trade disputes and their potential impact on the world’s largest economy.

Huawei, the world’s biggest telecoms equipment maker and a key plank in China’s ambitions towards dominating 5G networking around the globe, was placed on the ‘Entity List’ by the U.S. Commerce Department late Wednesday, a move that effectively prevents it from acquiring components and technology from American companies without prior government approval.

The decision will “prevent American technology from being used by foreign owned entities in ways that potentially undermine U.S. national security or foreign policy interests,” according to a statement from Commerce Secretary Wilbur Ross, and followed an executive order from the President that declared a national emergency linked to “threats against information and communications technology and services in the United States”.

The moves highlighted the distance between China and the United States on trade, following their tit-for-tat tariffs increases over that past week, and snuffed out a late Wednesday rally sparked by multiple media reports that Trump will delay applying new levies on auto imports from Europe and Japan for at least six months.

However, with Canada’s Foreign Minister, Chrystia Freeland, telling reporters in Washington that her country isn’t likely to ratify a new NAFTA trade agreement while tariffs on steel and aluminium remain in place, and the U.S. mired in disputes from London to Tokyo, investors were unwilling to add to risk positions in overnight Asia trade.

U.S. equity futures echoed that concern Thursday, although contracts tied to the Dow Jones Industrial Average are indicating a 130 point opening bell gain while those linked to the S&P 500 suggest an 13 point bump for the broader benchmark.

Markets were further rattled by weaker-than-expected readings for retail sales and activity in the manufacturing sector, both of which showed slumped last month as investor and consumer sentiment took a hit from the global trade war, sending benchmark 10-year U.S. Treasury yields to a near 15-month low of 2.359% and accelerating bets on a Federal Reserve rate cut later this year.

The U.S. Treasury moves came against data from the Treasury department which showed that China sold the largest portion of its U.S. government bond holdings — $20.45 billion — in more than three years in March, taking their total to $1.12 trillion, the lowest since May 2017, and re-igniting questions as to whether the largest U.S. creditor will use those holdings as a weapon on the escalating trade war.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 26,410.83.

The projected lower bound is: 25,322.10.

The projected closing price is: 25,866.46.

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.

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 55.2473. This is not an overbought or oversold reading. The last signal was a sell 16 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 45.25. 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 2 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 -39. This is not a topping or bottoming area. The last signal was a buy 1 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 14 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed up 214.660 at 25,862.680. Volume was 6% above average (neutral) and Bollinger Bands were 13% wider than normal.

Open High Low Close Volume___
25,692.14125,957.63125,692.14125,862.680 320,955,040

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

Moving Averages: 10-period 50-period 200-period
Close: 25,901.43 26,060.69 25,426.29
Volatility: 20 13 20
Volume: 301,712,192 300,034,976 318,339,424

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 1.7% above its 200-period moving average and is in an downward 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 volume flowing into and out of .DJI at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .DJI and have had this outlook for the last 6 periods.

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