Dow Jones Industrial Average (.DJI) soars 496 points as traders await official approval for $2 trillion coronavirus stimulus deal

Dow Jones Industrial Average (.DJI) soars 496 points as traders await official approval for $2 trillion coronavirus stimulus deal

Dow Jones Industrial Average (.DJI) soars 496 points as traders await official approval for $2 trillion coronavirus stimulus deal

The S&P 500 and the Dow Jones industrial average climbed on Wednesday as the Senate moved toward a final vote on a $2 trillion relief package to aid the economic fallout from the coronavirus outbreak.

The White House and the Senate reached an agreement overnight on the bill. The tech-heavy Nasdaq composite slid slightly on the day.

The package would expand unemployment benefits, push funds to hospitals and healthcare workers, issue emergency loans to both small and large businesses, and send checks to Americans; the bill calls for $1,200 payments for adults and $500 for each child.

About $50 billion is allocated for loans for airlines, an industry hit particularly hard by the pandemic and the sudden halt to travel.

The gains followed the Dow’s best day in 87 years. The benchmark index soared 11% through Tuesday’s session as a fiscal deal neared. The Federal Reserve had already issued monetary support through rate cuts, asset purchases, and new credit facilities.

The Senate stimulus package would more directly put money in the hands of ailing businesses and consumers as the outbreak risks near-term economic recession.

President Donald Trump’s Tuesday call to reopen the economy by Easter added fresh worry as US cases increased. The lack of unified shelter-in-place mandates “will cause uncertainty to rise again” and risks “stifling a possible recovery,” Bergstrand said.

Oil traded higher on Wednesday morning after turning lower in the previous session. The commodity has been under pressure in recent weeks as Saudi Arabia and Russia flood the market with fresh inventory and drive prices near two-decade lows.

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 25,590.84.

The projected upper bound is: 23,692.92.

The projected lower bound is: 17,864.00.

The projected closing price is: 20,778.46.

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.

A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 7 falling windows in the last 50 candles–this makes the current falling window even more bearish.

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 61.8821. This is not an overbought or oversold reading. The last signal was a sell 1 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 41.74. 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 6 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 11. This is not a topping or bottoming area. The last signal was a buy 6 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 4 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed down -973.650 at 20,943.510. Volume was 27% above average (neutral) and Bollinger Bands were 160% wider than normal.

Open     High      Low     Close     Volume___
21,227.38121,487.24020,784.43020,943.510 508,314,592
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 20,913.57 25,825.73 26,881.72
Volatility: 94 82 43
Volume: 701,492,224 517,070,368 323,386,880

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 down today (bearish) 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 22.1% 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 27 periods.

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