Dow Jones Industrial Average (.DJI) staging a strong comeback
Stocks rose on Thursday, erasing most of the steep losses from earlier in the week, as global bond yields rebounded while investors digested better-than-expected trade data out of China.
The Dow Jones Industrial Average closed 371.12 points higher, or 1.4% to 26,378.19. The S&P 500 advanced 1.9% to 2,938.09 while the Nasdaq Composite surged 2.2% to 8,039.16.
Thursday’s gains helped the indexes recover most of the sharp losses from Monday’s session. The Dow and S&P 500 fell nearly 3% each on Monday while the Nasdaq dropped 3.5%. The indexes hit the week’s lows on Wednesday before staging a strong comeback.
Through Thursday’s close, the S&P 500 and Nasdaq were up 0.2% and 0.4%, respectively, for the week. The Dow was only down 0.4%.
Strong data out of China helped calm Wall Street down. China said exports rose 3.3% on a year-over-year basis in July. Economists polled by Reuters expected exports to fall by 2%.
The data helped Asian stocks rise overnight. The Shanghai Composite gained 0.9% while the Nikkei 225 climbed 0.4%.
Investors also monitored the yuan. China’s central bank set the official reference rate for the Chinese currency at 7.0039 yuan per dollar on Thursday — the weakest level since April 21, 2008. Although, the new rate was stronger than the market had feared, possibly helping sentiment.
China set the yuan’s midpoint above 7 per U.S. dollar earlier this week. That sparked the worst sell-off on Wall Street for 2019.
“This still is an environment in which the policy risks are really in the driver’s seat,” said Bill Northey, senior investment director at U.S. Bank Wealth Management. “You’ve got trade and tariffs and monetary policy and there seems to be a feedback loop and interplay associated with those two key factors.”
Overall, the bias in prices is: Sideways.
The projected upper bound is: 27,008.76.
The projected lower bound is: 25,797.69.
The projected closing price is: 26,403.22.
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 28 white candles and 22 black candles for a net of 6 white candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 43.4907. This is not an overbought or oversold reading. The last signal was a buy 2 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 43.58. 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 2 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 -65. This is not a topping or bottoming area. The last signal was a buy 0 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 13 period(s) ago.
Rex Takasugi – TD Profile
DJ INDU AVERG closed up 371.119 at 26,378.189. Volume was 3% above average (neutral) and Bollinger Bands were 54% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 26,567.70 26,527.00 25,565.57
Volatility: 23 15 20
Volume: 329,098,784 268,548,416 316,394,688
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 3.2% 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 7 periods.
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