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Dow Jones Industrial Average (.DJI) set for sharp drop after worst first quarter ever

Dow Jones Industrial Average (.DJI) set for sharp drop after worst first quarter ever

Dow futures pointed to a drop of more than 700 points at Wednesday’s open on the first day of April and the second quarter on Wall Street. White House officials are projecting 100,000 to 240,000 U.S. deaths from COVID-19, with fatalities peaking over the next two weeks.

The Dow Jones Industrial Average on Tuesday closed out its worst first-quarter ever with a 410-point decline. The Dow’s plunge in March was the worst of any month since October 2008 during the financial crisis.

ADP issues its March report on private sector employment at 8:15 a.m. ET. On Thursday, the government’s look at weekly jobless claims is expected to show a second week of over 3 million people filing for unemployment insurance for the first time. On Friday, the government releases its monthly employment report for March.

The Institute for Supply Management is out with its March manufacturing index at 10 a.m. ET. Economists expect a contraction. February construction spending, also released at 10 a.m. ET, is expected to show an increase of 0.7% following January’s 1.8% advance. The nation’s major automakers, with the exception of Ford (F), deliver first quarter sales figures today. Ford’s numbers come out tomorrow.

More borrowers are refinancing their mortgages to save money on monthly payments, while potential homebuyers are backing away fast. Driven entirely by refinancing, total mortgage application volume increased 15.3% last week. Mortgage applications to purchase a home fell 11% last week. Refis surged 26%.

Macy’s (M) is being removed from the S&P 500 index and will be placed in the S&P SmallCap 600 as of April 6. Macy’s has a market cap of about $1.5 billion, the smallest in the S&P 500. Carrier Global, which will become a publicly traded company as of Friday following its spin-off from United Technologies (UTX), will replace Macy’s in the S&P 500.

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 25,627.38.

The projected upper bound is: 24,662.33.

The projected lower bound is: 18,874.76.

The projected closing price is: 21,768.54.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.

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 79.7126. 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 44.98. 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 5 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 buy 5 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 3 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed down -410.320 at 21,917.160. Volume was 45% above average (neutral) and Bollinger Bands were 201% wider than normal.

Open     High      Low     Close     Volume___
22,208.42022,480.36921,852.08021,917.160 573,591,232
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 20,809.11 25,990.78 26,907.57
Volatility: 98 82 43
Volume: 738,069,824 513,316,896 321,842,784

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 18.5% below its 200-period moving average and is in an downward 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 bearish on .DJI and have had this outlook for the last 26 periods.

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