Dow Jones Industrial Average (.DJI) market’s breadth remains positive
The Dow Jones Industrial Average DJIA, -1.23% sank to a triple-digit loss in afternoon trading Wednesday, after the Federal Reserve’s decision to cut its target on overnight interest rates, but the stock market’s breadth remained positive, helped by strength in small-capitalization stocks. The number of advancing stock outnumbered decliners 1,540 to 1,333 on the NYSE and 1,610 to 1,331 on the Nasdaq exchange.
Where breadth data showed some weakness was in the larger, more active stocks, as volume of advancing stocks represented just 45.2% of total volume on the Big Board and 36.7% of total volume on the Nasdaq. Meanwhile, the Dow fell 148 points, or 0.5%, with 25 of 30 components losing ground. Just before the Fed’s rate decision, the Dow was up about 14 points. The S&P 500 SPX, -1.09% gave up 0.5% and the Nasdaq Composite COMP, -1.19% shed 0.4%, while the Russell 2000 RUT, -0.69% of small-cap stocks rose 0.4%.
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 26,584.27.
The projected upper bound is: 27,385.14.
The projected lower bound is: 26,390.77.
The projected closing price is: 26,887.96.
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.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend. It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with DJ INDU AVERG), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 39.1646. This is not an overbought or oversold reading. The last signal was a sell 9 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 47.00. 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 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 -252.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 10 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 sell 7 period(s) ago.
Rex Takasugi – TD Profile
DJ INDU AVERG closed down -333.750 at 26,864.270. Volume was 43% above average (neutral) and Bollinger Bands were 41% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 27,178.53 26,447.07 25,544.16
Volatility: 9 12 20
Volume: 265,892,256 260,118,112 315,701,920
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 5.2% 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 1 periods.