Dow Jones Industrial Average (.DJI) stocks rallied overnight in response to the Fed chairman’s comments
The Fed was “closely monitoring the implications” of a global trade dispute that has disrupted bond and equity markets and posed risks to global economic growth, Mr Powell said.
“As always, we will act as appropriate to sustain the expansion, with a strong labour market and inflation near our symmetric 2 per cent objective.”
The US central bank chief made those comments on Tuesday (local time), as part of a speech on broader monetary policy issues.
Mr Powell’s comments reflected a diminishing faith at the Fed that the Trump administration would resolve its disputes with top trading nations in a way and on a timetable that poses little risk to the US economy.
The Fed has been on hold since its last rate increase in December, when it set the target federal funds rate to a range of between 2.25 and 2.5 per cent..
The probability of a Fed rate cut in September is about 90 per cent, according to CME FedWatch.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 25,644.40.
The projected upper bound is: 25,911.12.
The projected lower bound is: 24,746.44.
The projected closing price is: 25,328.78.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.
A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 5 rising windows in the last 50 candles–this makes the current rising window even more 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 30.5303. This is not an overbought or oversold reading. The last signal was a buy 0 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 43.84. This is not a topping or bottoming area. However, the RSI just crossed above 30 from a bottoming formation. This is a bullish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 0 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 -53. 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 26 period(s) ago.
Rex Takasugi – TD Profile
DJ INDU AVERG closed up 512.400 at 25,332.180. Volume was 6% below average (neutral) and Bollinger Bands were 9% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 25,334.12 25,988.33 25,426.59
Volatility: 19 14 20
Volume: 280,211,200 284,898,880 319,704,384
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 gapped up today (bullish) 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 0.4% 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 18 periods.