Dow Jones Industrial Average (.DJI) The United States and China have begun a critical day of trade negotiations
The US has not backed down from its threat to increase tariffs to 25 per cent, on $US200 billion ($286 billion) worth of Chinese imports, at 2:01pm (AEST).
Furthermore, US President Donald Trump said that paperwork had been initiated to impose 25 per cent tariffs on a further $US325 billion worth of Chinese goods.
China ‘broke the deal’
Wall Street fell sharply following the US President’s accusations, on Wednesday evening (local time), that China “broke the deal” at a rally attended by his supporters.
However, US markets recovered from the worst of their losses after Mr Trump indicated a trade deal was still possible.
Mr Trump also said that hereceived a “beautiful” letter from China’s President Xi Jinping asking to work together to “get something done”.
The Dow Jones index fell 139 points, or 0.5 cent, to 25,828. The industrial-skewed index has plummeted by more than 700 points this week.
The benchmark S&P 500 is down 0.3 per cent to 2,871 — having fallen by more than 3 per cent in the last few days.
The tech-heavy Nasdaq index lost 0.4 per cent to 7,911 amid the ongoing trade anxiety.
European markets were hit even harder — particularly for London’s FTSE (-0.9pc), Frankfurt (-1.7pc) and Paris (-1.9pc).
“What the market fears deep down is an all-out trade war with no hope for resolution,” said Tim Ghriskey, chief investment strategist at Inverness Counsel.
“Trading today is telling me that the expectation for a trade deal is now that it’s likely to happen a bit sooner than months away or never.”
Shares of US chipmakers, which get a large portion of the revenue from China, continued to slide, with the Philadelphia semiconductor index ending 1.2 per cent lower.
The index has fallen 6 per cent so far this week and is on track to post its biggest percentage weekly loss since December.
The CBOE Volatility Index (VIX), a gauge of investor anxiety, rose for the fourth consecutive session and is at its highest level in more than three months.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 26,295.29.
The projected lower bound is: 25,355.16.
The projected closing price is: 25,825.22.
A black body occurred (because prices closed lower than they opened).
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 24 white candles and 26 black candles for a net of 2 black candles.
A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 3 falling windows in the last 50 candles–this makes the current falling window even more bearish.
A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).
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 24.9377. This is not an overbought or oversold reading. The last signal was a sell 11 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 37.04. 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 51 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 -199.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 4 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 9 period(s) ago.
Rex Takasugi – TD Profile
DJ INDU AVERG closed down -138.971 at 25,828.359. Volume was 10% above average (neutral) and Bollinger Bands were 41% narrower 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: 26,313.28 26,079.33 25,419.44
Volatility: 13 12 20
Volume: 300,657,536 297,902,400 318,007,680
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 down today (bearish) 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 1.6% 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 1 periods.