Dow Jones Industrial Average (.DJI) rebound has been helped by the Federal Reserve’s adoption of a more patient approach to further interest rate hikes

Dow Jones Industrial Average (.DJI) rebound has been helped by the Federal Reserve’s adoption of a more patient approach to further interest rate hikes

Dow Jones Industrial Average (.DJI) rebound has been helped by the Federal Reserve’s adoption of a more patient approach to further interest rate hikes

Shares surged Monday in Asia following a bullish end to last week on Wall Street, where the benchmark S & P 500 logged its biggest quarterly gain in nearly a decade.

Japan’s Nikkei 225 index added 1.9 per cent to 21,604.76, easing off earlier highs after newly released economic data showed conditions deteriorating. The Shanghai Composite index jumped 2.3 per cent to 3,161.49 and Hong Kong’s Hang Seng added 1.6 per cent to 29,525.48.

The Bank of Japan reported Monday that a survey of major Japanese manufacturers showed business sentiment worsening in March compared with three months earlier. The central bank’s “tankan” showed confidence of major companies such as automakers sank to 12 from 19 in December’s survey.

It was an inauspicious start for the day when the name of the era of the soon-to-be-emperor Naruhito, “Reiwa,” was announced. Naruhito, the crown prince, will ascend the Chrysanthemum Throne after his father, Emperor Akihito, abdicates as of April 30. The name, whose poetic meaning is not entirely clear from the characters used, was drawn from the 7th century poetry collection Manyoshu.

Elsewhere in Asia, South Korea’s Kospi climbed 1.3 per cent to 2,167.83 and the S&P ASX 200 rose 0.7 per cent in Australia to 6,221.30. India’s Sensex gained 0.5 per cent to 38,895.75 and shares also rose in Taiwan, Singapore and Thailand. Indonesia’s benchmark fell.

Adding to economic gloom in Japan, the Nikkei Japan purchasing manager’s index showed output in manufacturing falling at its fastest rate in nearly three years in March due to weak demand both at home and abroard.

“The economic backdrop for the manufacturing sector in Japan remains fiercely challenging,” Joe Hayes, an economist at HIS Markit, which compiles the survey, said in a commentary. “Asian goods producers face headwinds from slowing growth in Europe and China, while global trade risks are yet to be mitigated by a breakthrough in US-Sino relations.”

Stocks finished broadly higher Friday on Wall Street, with the S&P 500 index up 0.7 per cent, to 2,834.40, a gain of 13.1 per cent so far this year, a drastic turnaround for stocks after a jarring 14 per cent sell-off in the last three months of 2018.

The Dow Jones Industrial Average rose 0.8 per cent to 25,928.68. The Nasdaq composite surged 0.8 per cent to 7,729.32 and the Russell 2000 index of smaller company stocks picked up 0.3 per cent, to 1,539.74.

The Dow ended the quarter with an 11.2 per cent gain, while the Nasdaq is up 16.5 per cent. The Russell 2000 is 14.2 per cent higher this year.

The rebound has been helped by the Federal Reserve’s adoption of a more patient approach to further interest rate hikes. That has reassured investors, who’d worried that the Fed would continue to raise rates amid signs of a slowing global economy.

In the coming week, investors are hoping for progress in U.S.-Chinese trade talks that are due to resume in Washington after a round in Beijing last week that U.S. Treasury Secretary Steven Mnuchin described as “constructive.”

Officials from the world’s two biggest economies are aiming to put to rest a dispute over technology and other issues. Chinese Vice Premier Liu He is expected to travel to Washington next week.

Investors will be focusing more on corporate earnings in coming weeks, as the next big wave of company results kicks into gear in mid-April.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 26,495.83.

The projected lower bound is: 25,430.39.

The projected closing price is: 25,963.11.

Candlesticks

A white body occurred (because prices closed higher 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.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 7 rising windows in the last 50 candles–this makes the current rising window even more 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 67.1698. This is not an overbought or oversold reading. The last signal was a sell 7 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 57.97. 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 23 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 91. This is not a topping or bottoming area. The last signal was a buy 13 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 21 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed up 211.219 at 25,928.680. Volume was 12% below average (neutral) and Bollinger Bands were 69% narrower than normal.

Open High Low Close Volume___
25,827.31125,949.32025,771.67025,928.680 300,617,440

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

Moving Averages: 10-period 50-period 200-period
Close: 25,745.83 25,462.99 25,190.98
Volatility: 14 13 20
Volume: 310,553,408 313,309,056 320,897,024

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 gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
DJ INDU AVERG is currently 2.9% 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 15 periods.

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