Dow Jones Industrial Average (.DJI) mixed economic data have made it more difficult to gauge the trajectory of the U.S. economy

Dow Jones Industrial Average (.DJI) mixed economic data have made it more difficult to gauge the trajectory of the U.S. economy

Dow Jones Industrial Average (.DJI) mixed economic data have made it more difficult to gauge the trajectory of the U.S. economy

The Dow Jones Industrial Average traded within a 353-point range on Wednesday, reflecting a tepid pre-market for U.S. stock futures. The blue-chip index settled down 32.14, or 0.1%, at 25,625.59. Walmart Inc. (WMT) and Chevron Corp (CVX) were the Dow’s biggest laggards.

The broad S&P 500 Index of large-cap stocks fell 0.5% to 2,805.37. Nine of 11 primary sectors were in the red, with healthcare leading the decline.

Meanwhile, the technology-focused Nasdaq Composite Index declined 0.6% to close at 7,643.38.

A measure of implied volatility known as the CBOE VIX reached a session high of 16.71 on a scale of 1-100 where 20-25 represents the historic average. It would later backtrack to settle at 15.17, having gained 3.3%.

Stock markets came under pressure Wednesday after U.S. Treasury yields fell to fresh 15-month lows. The yield on the benchmark 10-year Treasury note fell to 2.384% from 2.418% on Tuesday. Yields drop when bond prices rise.

On Friday, a closely-watched yield curve inverted for the first time in more than a decade, sending stock prices plunging. The yield on the U.S. 10-year Treasury note fell below the yield on the 3-month T-Bill, a rare occurrence that economists say is an accurate predictor of recession.

While the U.S. economy has outperformed its major counterparts overseas, a protracted downturn in places like Europe, China, and Japan could have adverse consequences back home. Key members of the Trump administration will travel to China this week to continue negotiating a new trade agreement that many believe can help avert a bigger slowdown.

Investors say mixed economic data have made it more difficult to gauge the trajectory of the U.S. economy. Earlier this month, the Labor Department reported the most significant slowdown in nonfarm payrolls in well over a year even as wages accelerated faster than expected. Inflationary pressures have also waned, and housing continues to struggle despite the renewed pause on interest rates.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 26,191.21.

The projected lower bound is: 25,128.60.

The projected closing price is: 25,659.90.

Candlesticks

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 30 white candles and 20 black candles for a net of 10 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 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 33.9529. This is not an overbought or oversold reading. The last signal was a sell 5 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 50.10. 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 21 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 -41. This is not a topping or bottoming area. The last signal was a buy 11 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 19 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed down -32.141 at 25,625.590. Volume was 21% below average (neutral) and Bollinger Bands were 67% narrower than normal.

Open High Low Close Volume___
25,676.34025,758.17025,425.27025,625.590 270,344,800

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

Moving Averages: 10-period 50-period 200-period
Close: 25,737.09 25,395.53 25,185.96
Volatility: 13 13 20
Volume: 348,744,160 314,441,408 320,920,544

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 13 periods.

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