The Dow Jones finished up $779(3.4%) on Wednesday with an opening price of $22,893 and closing price of $23,433. Price held above the 38.2% Fibonacci retracement level which is acting as short-term support after previously being a resistance level, but price remains below the 50% Fib which is the middle of the total Fib range from the February high to the coronavirus selloff low in March. A move above the 50% Fib would mean price has regained 50% of the losses during the record-breaking selloff and be an indication that traders are becoming more bullish on price and that the worst is behind us. A price move back below the 38.2% Fib level would be a sign of weakness or hesitation by traders to push price to new highs, while a move below the 23.6% Fib level would be bearish and also take out our higher low(stop-loss) level and be an indication that price is likely to retest the low seen in March with the possibility of making new lows. For this reason, the Higher Low at the 23.6% Fib level is where stop-loss orders should be placed if currently long this market.
The Relative Strength Index(RSI) is leveling off after recently crossing above the centerline at the 50 level. This indicates that upward momentum has stalled as price is testing the 50% Fibonacci level. An RSI reading(green line) above 50 indicates bullish momentum behind price while an RSI reading below 50 indicates bearish momentum.
The Price Percent Oscillator(PPO) continues to rise with the green PPO line above its purple signal line which indicates short-term bullish momentum, but both lines remain below the 0 level which indicates overall bearish momentum. A PPO reading below 0 indicates bearish momentum while a PPO reading above 0 indicates bullish momentum.
The current price candle is gray which indicates neutral, or no momentum behind price in my price candle algorithm.
The overall view on price remains neutral here as price holds above the 38.2% Fib and below the 50% Fib. A move above the 50% Fib would be bullish, while a move below the 38.2% would begin to shift the view back to bearish.
The Relative Strength Index(RSI) is leveling off after recently crossing above the centerline at the 50 level. This indicates that upward momentum has stalled as price is testing the 50% Fibonacci level. An RSI reading(green line) above 50 indicates bullish momentum behind price while an RSI reading below 50 indicates bearish momentum.
The Price Percent Oscillator(PPO) continues to rise with the green PPO line above its purple signal line which indicates short-term bullish momentum, but both lines remain below the 0 level which indicates overall bearish momentum. A PPO reading below 0 indicates bearish momentum while a PPO reading above 0 indicates bullish momentum.
The current price candle is gray which indicates neutral, or no momentum behind price in my price candle algorithm.
The overall view on price remains neutral here as price holds above the 38.2% Fib and below the 50% Fib. A move above the 50% Fib would be bullish, while a move below the 38.2% would begin to shift the view back to bearish.