DJIA closes lower for the 3rd day in a row
Dow Jones Industrial Average Index (DJIA) Technical Analysis Report for Dec 07, 2018 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, DJIA finished the week -4.5% lower at 24388.95 after tanking $558.72 (-2.24%) today following today's NFP report. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (DJIA as at Dec 07, 2018):
Friday's trading range has been $810.84 (3.25%), that's far above the last trading month's daily average range of $421.92. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DJIA.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 24284.78 earlier during the day, the market bounced off the key technical support level at 24368.98 (S1). The failure to close below the support could increase that levels significance as support going forward. Unable to break through the key technical resistance level at 24965.77 (R1), the stock index closed below it after spiking up to 25095.62 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. When prices bounced off a significant resistance level the last time on Monday, DJIA lost -3.10% on the following trading day. After having been unable to move lower than 24242.22 in the prior session, the Dow found buyers again around the same price level today at 24284.78.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could speed up should prices move below the nearby swing low at 24242.22 where further sell stops might get triggered. Trading close to October's low at 24122.23 we could see further downside momentum if potential sell stops at the level get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) below 20" stand out. Its common bullish interpretation has been confirmed for Dow Indu.. Out of 234 times, DJIA closed higher 56.41% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 65.81% with an average market move of 0.94%.
With four out of the other six Major World Indices closing lower following today's NFP report, the ones that stand out on the negative side are NDX losing -3.3% and SPX closing -2.33% lower. On the flipside the best performers have been FTSE closing 1.1% higher and NKY gaining 0.82%. Read more