Dow Jones Industrial Average (.DJI) to tread cautiously on trade deal news

Dow Jones Industrial Average (.DJI) to tread cautiously on trade deal news

Dow Jones Industrial Average (.DJI) to tread cautiously on trade deal news

Investors are set to react cautiously to any positive trade deal news this week, with a phase one US-China trade pact before the end of the year looking increasingly unlikely.

Despite positive comments from both Beijing and Washington last week, ASX futures were up just 12 points, or 0.2 per cent, ahead of Monday’s open.

On Friday, Chinese President Xi Jinping said Beijing wanted to work towards a trade deal on the basis of “mutual respect and equality”.

Later,  US President Donald Trump said a trade deal was “potentially very close”. “The bottom line is, we have a very good chance to make a deal,” he said.

While shares on Wall Street rallied slightly in response to the news, the cautious reaction underscored the market’s hesitancy to price in a resolution any time soon.

While sentiment recovered slightly following comments from Chinese Vice-Premier and chief trade negotiator Liu He that he was cautiously optimistic about reaching a deal, the local equity market still closed the week lower.

The sell-off showcased just how fragile positive sentiment surrounding a potential deal has become, and markets are likely to take a more cautious approach to positive news.

While China appears eager to make a deal, the US has proved more willing to hold off in the near term.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 27,304.04.

The projected upper bound is: 28,378.72.

The projected lower bound is: 27,398.77.

The projected closing price is: 27,888.74.

Candlesticks

A white body occurred (because prices closed higher 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 26 white candles and 24 black candles for a net of 2 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 35.1190. 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 65.32. 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 54. 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 1 period(s) ago.

Rex Takasugi – TD Profile

DJ INDU AVERG closed up 109.330 at 27,875.619. Volume was 17% below average (neutral) and Bollinger Bands were 15% narrower than normal.

Open     High      Low     Close     Volume___
27,831.23027,898.46127,773.98027,875.619 218,577,712
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 27,838.67 27,104.10 26,425.25
Volatility: 7 12 15
Volume: 250,932,656 252,366,064 272,270,368

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 5.5% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. 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 16 periods.

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