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Dow Jones Industrial Average (.DJI), S&P 500, Nasdaq Point To Monday Opening Hike

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Dow Jones Industrial Average (.DJI), S&P 500, Nasdaq Point To Monday Opening Hike

On Sunday, there was no sign the U.S. Cavalry was coming to rescue Wall Street from another bloodbath on Monday. Futures that day portended a continuation of the selloff that marked last Friday’s trading, and ended a historic three day-long rally.

On Monday, however, the Cavalry arrived and nobody’s sure what it was. The likeliest guess is the Monday spike in futures was just another peak after the trough on Sunday. On Sunday, futures suggested an implied opening drop of more than 300 points for the Dow Jones Industrial Average.

Early Monday morning, however, Dow futures went into reverse and clawed upwards by 132 points, pointing to an implied rise of about 59 points at the Monday open. S&P 500 futures and NASDAQ 100 futures also indicated a slightly higher opening on Monday. Futures might swing lower before trading opens, however.

“Equity markets are overextended, but face a bumpy period of even grimmer virus news and poor economic statistics in the next 1-2 months,” wrote MRB Partners in a note to investors. “The world is now entering a third phase, the first being the shock of an out-of-control virus spreading around the globe, then the massive policy response, and now the economic fallout phase has arrived and will test investors’ very fragile confidence.”

Investors now seem eager to put Friday’s selloff behind them.

All three indices lost big in a huge selloff Friday as news the U.S. hit 100,000 confirmed COVID-19 cases overcame any enthusiasm ignited by president Donald Trump signing the $2 trillion coronavirus economic stimulus bill on the same day.

Friday’s rout ended a three-day Wall Street winning streak. The uptick saw the Dow yield 915.39 points, or 4.1%, to 21,636.78. The benchmark S&P 500 lost 3.4% to 2,541.47 while the tech-heavy NASDAQ ended 3.7% lower at 7,502.38.

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 25,737.42.

The projected upper bound is: 24,365.22.

The projected lower bound is: 18,612.60.

The projected closing price is: 21,488.91.

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 22 white candles and 28 black candles for a net of 6 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 85.5157. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 3 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 43.62. 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 3 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 28. This is not a topping or bottoming area. The last signal was a buy 3 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 1 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed down -915.391 at 21,636.779. Volume was 52% above average (neutral) and Bollinger Bands were 260% wider than normal.

Open     High      Low     Close     Volume___
21,898.47122,327.57021,469.27021,636.779 591,330,432
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 20,527.23 26,278.80 26,947.32
Volatility: 130 81 43
Volume: 783,200,256 502,687,680 318,347,680

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 19.7% 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 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 24 periods.

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