Dow Jones Industrial Average (.DJI) surges, gaining 1,200 points in massive comeback rally
The Dow Jones Industrial Average surged on Monday, gaining over 1,200 points in a comeback rally that represented the blue-chip index’s best one-day point gain in history.
The Dow’s performance was in stark contrast to the 3,500-point loss it suffered last week. The S&P 500 and the Nasdaq also soared on Monday, gaining around 4.5 percent by the closing bell.
The rally came as Wall Street traders were bullish after French Finance Minister Bruno Le Maire said G7 finance ministers would convene via conference call on Tuesday to discuss the virus and coordinate an economic recovery plan.
Last week was the worst performance for all three major averages since the financial crisis, with the S&P 500, the Nasdaq, and the Dow all entering correction. Markets were down for seven straight days, with the Dow hitting its biggest ever drop on Thursday, with a record decline of 1,190 points.
The sell-off was fueled by rising uncertainty about the coronavirus epidemic, and came amid multinational companies abandoning or downgrading their forecasts for 2020 due to near-paralysis in their supply chains, production lines and cargo shipping.
The stock market has ratcheted up a 38 percent gain since President Donald Trump came into office, though that stood at 61 percent prior to last week’s meltdown.
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 27,879.91.
The projected upper bound is: 27,785.29.
The projected lower bound is: 25,558.80.
The projected closing price is: 26,672.04.
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 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.
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 26.1199. 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 36.19. 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 -100.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 11 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 6 period(s) ago.
Rex Takasugi – TD Profile
DJ INDU AVERG closed up 1,293.961 at 26,703.320. Volume was 119% above average (neutral) and Bollinger Bands were 303% 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: 27,667.17 28,629.27 27,241.99
Volatility: 48 26 18
Volume: 478,912,736 323,257,344 275,084,768
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 2.0% 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 5 periods.