Dow Jones Industrial Average (.DJI) posting a fourth straight week of gains

Dow Jones Industrial Average (.DJI) posting a fourth straight week of gains

Dow Jones Industrial Average (.DJI) posting a fourth straight week of gains

World stock indexes have jumped, with Wall Street posting a fourth straight week of gains, and the US dollar reaching its first positive week since mid-December as optimism increased that an end is in sight to the US-China trade conflict.

Stocks were boosted by a Bloomberg report that said China sought to raise its annual goods imports from the United States by more than $US1 trillion in order to reduce its trade surplus to zero by 2024.

That followed a report on Thursday that US Treasury Secretary Steven Mnuchin was considering lifting some or all tariffs imposed on Chinese imports. The Treasury denied Mnuchin had made any such recommendation.

While the equity rally lifted all major sectors, trade-sensitive industrials .SPLRCI posted among the biggest S&P 500 sector gains, up 1.9 per cent on the day.

The Philadelphia SE semiconductor index rose more than 2 per cent and Germany’s exporter-heavy DAX was up 2.6 per cent.

“There seems to be some progress going in the trade negotiations,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

While that was the biggest influence, “we’ve still got momentum since the first of the year,” he said. “Some of the money that came out of the market at year-end, whether it was high frequency traders or tax-loss selling, is coming back in.”

Adding to strength in equities and supporting US Treasury yields was data that showed US manufacturing output increased the most in 10 months in December.

Some strategists said relatively light equity trading volume this week indicated that some investors were still waiting on the sidelines.

The Dow Jones Industrial Average rose 336.25 points, or 1.38 per cent, to 24,706.35, the S&P 500 gained 34.75 points, or 1.32 per cent, to 2,670.71 and the Nasdaq Composite added 72.77 points, or 1.03 per cent, to 7,157.23.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 25,814.86.

The projected lower bound is: 23,567.63.

The projected closing price is: 24,691.24.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 10 white candles and 0 black candles for a net of 10 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 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 89.9243. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 10 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 61.45. 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 16 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 152.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.

MACD

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 336.250 at 24,706.350. Volume was 5% above average (neutral) and Bollinger Bands were 36% wider than normal.

Open High Low Close Volume___
24,534.18924,750.22124,459.02924,706.350 372,972,544

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

Moving Averages: 10-period 50-period 200-period
Close: 24,045.48 24,330.89 24,968.80
Volatility: 9 30 20
Volume: 311,052,096 368,653,152 328,609,056

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 1.1% below 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 5 periods.

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