Dow Jones Industrial Average (.DJI) Today: Middle East Focus Factors Into The Equation Again
By no means was it a terrible Tuesday despite the fact that 23 of 30 Dow Jones stocks were lower in late trading. There was some other good news, albeit on an anecdotal level, including that of a well-known market forecast that has notoriously been reluctant to endorse higher S&P 500 targets finally coming around.
“Francois Trahan, head of U.S. equity strategy at UBS Group AG, raised his year-end target for the S&P 500 Index to 3,250 from a previous target of 3,000 set in November,” reports Bloomberg.
Trahan’s prior call of 3,000 was one of the lowest on Wall Street.
In economic news, the U.S. trade deficit declined by about $43.1 billion in November due in large part to the trade war with China.
“The deficit with China decreased $2.2 billion in November to $25.6 billion owing to a $1.4 billion increase in exports and an $800 million decline in imports,” according to CNBC.
With that, let’s have a look at some of Tuesday’s winners and losers.
Another Up Day For Boeing
Boeing (NYSE:BA) added to Monday’s gains, jumping as much as 1.38% today after the company said it’s recommending pilot simulator training for those who will fly the 737 MAX jet, when that controversial plane finally gets airborne again.
“This recommendation takes into account our unstinting commitment to the safe return of service as well as changes to the airplane and test results. Final determination will be established by the regulators,” said the company in a statement.
There’s also a rumor floating around that Warrren Buffett’s Berkshire Hathaway (NYSE:BRK-A) is building a position in Boeing. That coupled with the Iran drama boosting defense stocks are factors helping Boeing start 2020 on a strong note.
Johnson & Johnson (NYSE:JNJ) still faces an array of courtroom issues this year, but the company appears to have put at least one element of that to bed amid news that a California talc trial has been halted after the judge told jurors a settlement has been reached. Shares of JNJ posted a modest gain.
Rough Day For Industrials
Aside from Boeing, the Dow’s other industrial names — Caterpillar (NYSE:CAT), 3M (NYSE:MMM) and United Technologies (NYSE:UTX) — were stung today by another slack manufacturing data point.
“Latest data showed new orders for U.S.-made goods fell in November, pulled down by steep declines in demand for machinery and transportation equipment, pointing to sustained weakness in manufacturing,” according to Reuters.
Should Caterpillar and 3M be Dow laggards again, that puts some burden on Boeing to carry the Dow’s industrial exposure and for other groups – namely technology – to prop up the blue chip index this year.
Bottom Line on the Dow Jones Today
I noted yesterday that fourth-quarter earnings are a potential catalyst or trouble spot for stocks over the near-term and while it’s not a marquee report, investors will get an earnings taste from Dow component Walgreens Boots Alliance (NASDAQ:WBA) when the pharmacy operator reports quarterly results tomorrow.
Wall Street expects WBA to earn $1.41 per share on sales of $34.6 billion. Remember, WBA was one of the worst-performing names in the Dow last year, so this report could go a long way toward bolstering sentiment on the stock.
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 27,968.22.
The projected upper bound is: 29,028.42.
The projected lower bound is: 28,210.06.
The projected closing price is: 28,619.24.
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 31 white candles and 19 black candles for a net of 12 white 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 53.2241. This is not an overbought or oversold reading. The last signal was a sell 5 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 59.19. 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.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 0 period(s) ago.
Rex Takasugi – TD Profile
DJ INDU AVERG closed down -119.701 at 28,583.680. Volume was 7% above average (neutral) and Bollinger Bands were 10% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 28,612.50 27,951.84 26,784.50
Volatility: 10 9 14
Volume: 207,044,320 249,638,176 263,196,688
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 6.7% above its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. 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 17 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.