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Tuesday, December 7, 2021

Dow Jones Industrial Average (.DJI) set to open 1,000 points lower

Dow Jones Industrial Average (.DJI) set to open 1,000 points lower

Oil prices suffered the biggest plunge since the Gulf War in 1991 over the weekend, leading the Dow Jones Industrial Average to open down 1,000 points and the UK’s FTSE 100 down 300 points as coronavirus fears shake global markets.

Crude oil prices plummeted 30 percent in a trade war between Saudi Arabia and Russia sparked by the virus.   

While stock futures on the Dow sank 1,000 points, S&P 500 futures and Nasdaq Composite futures lost more than four percent of their value. 

Global stock markets took hits on Sunday with the Tokyo stock market index plunging 6.2 percent, Hong Kong 3.9 percent, Sydney 6.1 percent, and Riyadh eight percent.

The stock market shake-up is due to panic over the coronavirus and a price war over crude oil after talks in Vienna between the Organization of Petroleum Exporting Countries alliance (OPEC) and Russia collapsed on Friday. 

Brent Crude, the major international trading classification for light crude oil that serves as one of the two benchmark prices for oil worldwide, sunk by 30 percent just seconds after trading opened in Asia on Monday, dropping to $31.02 a barrel at its lowest point.  

Goldman Sachs Group warned prices could drop into the 20s. 

US West Texas Intermediate crude, the other main price benchmark for oil, dropped 27% to $30 per barrel – the lowest level since February 2016.

The drop in prices came after Russia and Saudi Arabia were unable to come to an agreement at the OPEC meeting. 

The group sought to set oil production cuts due to a lack of global crude oil demand in the coronavirus panic. 

OPEC had recommended additional production cuts of 1.5million barrels per day starting in April and extending until the end of the year. 

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 27,687.91.

The projected upper bound is: 27,136.15.

The projected lower bound is: 24,485.94.

The projected closing price is: 25,811.04.


A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 25 white candles and 25 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 66.8060. This is not an overbought or oversold reading. The last signal was a buy 4 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 36.18. 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 4 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 -86. This is not a topping or bottoming area. The last signal was a buy 3 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 10 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed down -256.500 at 25,864.779. Volume was 98% above average (neutral) and Bollinger Bands were 307% wider than normal.

Open     High      Low     Close     Volume___
25,457.21125,994.38125,226.61925,864.779 601,008,128
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 26,487.34 28,456.70 27,251.04
Volatility: 61 31 20
Volume: 586,284,928 339,124,096 280,274,304

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 5.1% below 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 moderate flows of volume out of .DJI (mildly bearish). Our trend forecasting oscillators are currently bearish on .DJI and have had this outlook for the last 9 periods.

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