Dow Jones Industrial Average (.DJI) stocks extend record highs amid powerful cyclical rally
The Dow Jones Industrial Average rose slightly to a fresh record on Tuesday, lifted by strong economic data and new developments between the U.S. and China on trade.
The 30-stock gauge gained about 30.52 points, or 0.1%, to a new record closing high of 27,492.63 in its third straight positive day. The Nasdaq Composite was little changed at 8,434.68, weighed down by a 1.6% loss in Netflix shares. The S&P 500 fell 0.1% to 3,074.67 however, as underperformance in real estate and utilities sectors capped gains in the broad market.
Dow-component Boeing gained 2% after the company said the CEO would forgo bonuses this year amid the 737 Max crisis.
Strong earnings, more promising economic data and trade progress drove the Dow to an all-time high on Monday, following the S&P 500 and Nasdaq’s new records reached last week.
Better-than-expected economic data helped left the Dow. A gauge for U.S. services activities topped expectations for October. The ISM non-manufacturing index came in at 54.7, as compared with a 53.5 estimate as forecast by economists polled by Dow Jones.
The financial sector was the best-performing group among 11 S&P 500 sectors as yields continued to rise on trade-deal hopes. Bank of America was up 1.3%, while J.P. Morgan rose 0.2%.
The Dow’s year-to-date gain now stands at nearly 18% after rallying 3.4% in the past month. The S&P 500 is up more than 22% this year after surging 4.1% in the past month.
The corporate earnings season has largely been better than expected as 75% of the S&P 500 companies that have reported topped analyst expectations, FactSet data shows. Adobe surged 5% on Tuesday after the software company issued better-than-expected guidance for fiscal year 2020.
The U.S. trade deficit with its global partners contracted to $52.5 billion in September as the U.S. and China worked towards a tariff truce, according to a Commerce Department report Tuesday.
Shares of Walgreens Boots Alliance rose 2.6% on reports the company has been exploring a deal to go private.
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 26,789.19.
The projected upper bound is: 28,076.68.
The projected lower bound is: 26,972.34.
The projected closing price is: 27,524.51.
A black body occurred (because prices closed lower 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 27 white candles and 23 black candles for a net of 4 white candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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 92.6208. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 8 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 65.57. 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 64 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 167.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 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 buy 16 period(s) ago.
Rex Takasugi – TD Profile
DJ INDU AVERG closed up 30.521 at 27,492.631. Volume was 14% above average (neutral) and Bollinger Bands were 21% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 27,129.47 26,796.64 26,240.93
Volatility: 8 13 15
Volume: 268,696,256 251,031,344 277,930,592
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 4.8% 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 moderate flows of volume into .DJI (mildly bullish). Our trend forecasting oscillators are currently bullish on .DJI and have had this outlook for the last 3 periods.