Dow Jones Industrial Average (.DJI) Stocks end lower after failed Trump-Kim summit

Dow Jones Industrial Average (.DJI) Stocks end lower after failed Trump-Kim summit

Dow Jones Industrial Average (.DJI) Stocks end lower after failed Trump-Kim summit

U.S. stocks finished lower Thursday after a sudden breakdown in denuclearization talks with North Korea weighed on sentiment, even though main indexes posted strong gains in February. Better-than-expected fourth-quarter gross domestic product data helped to offset some of the selling pressure during the session.

How did stock indexes fare?
The Dow Jones Industrial Average DJIA, -0.27% fell 69.16 points, or 0.3%, to 25,916; the S&P 500 index SPX, -0.28% shed 7.89 points, or 0.3%, to 2,784.49; and the Nasdaq Composite Index COMP, -0.29% declined 21.98 points, or 0.3%, to 7,532.53.

All indexes rose for a second month in a row, with the Dow rallying 3.7% in February, the S&P 500 up 3% and the Nasdaq gaining 3.4%.

What drove the market?
White House spokeswoman Sarah Sanders told reporters at a news conference that a U.S.-North Korean nuclear agreement couldn’t be reached at the summit in Hanoi because the isolated nation wanted more sanctions lifted than Trump would allow.

President Donald Trump’s inability to persuade North Korean leader Kim Jong Un to give up nukes comes about eight months after the first meeting between the two leaders in Singapore failed to achieve concrete goals. Still, the president expressed hope that a pact could be achieved and described North Korea as having “tremendous potential.”

The political developments in Vietnam followed poor data out of China, with the country’s official manufacturing purchasing managers index figures contracting for a third consecutive month.

On Wednesday, U.S. Trade Representative Robert Lighthizer said the U.S. would abandon — for now — its threat to raise tariffs to 25% on $200 billion of Chinese goods on March 2.

The Commerce Department’s estimate of fourth-quarter GDP growth showed the U.S. economy growing at a rate of 2.6%, well above consensus expectations of 1.9%, per a MarketWatch poll of economists. GDP grew at 2.9% during 2018, according to the preliminary estimates by the Commerce Department, representing the best growth in three years. However, market participants highlighted the economic reports highlight expansion that is tapering from heady levels of a 4.2% growth rate in the second quarter of 2018.

Beyond GDP data, the Labor Department estimated that the number of American applying for unemployment benefits in the week ended Feb. 9 rose by 4,000 to a seasonally-adjusted rate of 239,000. Economists polled by MarketWatch were expecting 225,000.

The Chicago purchasing managers index rose 8 points to a reading of 64.7 in February, the largest increase since last February.

The U.S. homeownership rate in the fourth quarter was 64.8%, the Commerce Department reported, in line with expectations of economists polled by MarketWatch. Meanwhile, the national vacancy rate was 6.6% for rental housing and 1.5% for owner-occupied housing.

Federal Reserve Vice Chairman Richard Clarida said the Fed wants to be “very, very clear” that it is not altering its 2% inflation target, as it considers ways to better use that data to inform rate-hike policy. The official was speaking at the 35th Annual NABE Economic Policy Conference in Washington on “Promoting Global Growth and Domestic Economic Security.”

Overall, the bias in prices is: Upwards.

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

By the way, prices are vulnerable to a correction towards 25,054.29.

The projected upper bound is: 26,869.92.

The projected lower bound is: 25,034.70.

The projected closing price is: 25,952.31.

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 31 white candles and 19 black candles for a net of 12 white 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 42.1503. This is not an overbought or oversold reading. The last signal was a sell 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 64.62. 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 sell 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 51. This is not a topping or bottoming area. The last signal was a sell 2 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 sell 0 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed down -69.160 at 25,916.000. Volume was 5% below average (neutral) and Bollinger Bands were 34% narrower than normal.

Open High Low Close Volume___
25,984.27926,029.21125,896.56125,916.000 338,521,312

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 25,910.19 24,478.31 25,100.82
Volatility: 12 25 20
Volume: 287,885,056 345,081,760 321,222,368

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 3.2% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of .DJI at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .DJI and have had this outlook for the last 32 periods.

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