Dow Jones Industrial Average (.DJI) lower as investors reacted to dovish commentary from Fed
The Dow and broader U.S. stock market declined sharply on Tuesday, as investors reacted to dovish commentary from Fed chief Jerome Powell that suggested central bankers were becoming ever-more concerned about the economy.
Dow, S&P 500, and Nasdaq Sink in a Sea of Red
All of Wall Street’s benchmark indexes traded in negative territory on Tuesday, which reflected a tepid pre-market for Dow futures. The Dow Jones Industrial Average fell 179.32 points, or 0.7%, to 26,548.22.
The broad S&P 500 Index of large-cap stocks fell 1% to 2,917.37. Nine of 11 primary sectors reported losses, led by information technology and communication services.
Weakness in tech and communication shares had an oversized impact on the Nasdaq Composite Index, which has higher exposure to both sectors. The index plunged 1.5% to 7,884.72
The CBOE Volatility Index, Wall Street’s preferred measure of investor anxiety, jumped to its highest level in over three weeks. The so-called ‘VIX fear index’ peaked at 16.68 on a scale of 1-100 where 20-25 represents the historic average.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 27,141.01.
The projected lower bound is: 25,960.87.
The projected closing price is: 26,550.94.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
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.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 64.1676. This is not an overbought or oversold reading. The last signal was a sell 0 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 62.48. 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 15 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 75. This is not a topping or bottoming area. The last signal was a sell 0 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 13 period(s) ago.
Rex Takasugi – TD Profile
DJ INDU AVERG closed down -179.318 at 26,548.221. Volume was 2% below average (neutral) and Bollinger Bands were 93% 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: 26,403.13 26,033.75 25,453.00
Volatility: 10 15 20
Volume: 263,732,160 284,056,672 320,784,128
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 4.3% 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 9 periods.
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