NASDAQ Composite (.IXIC) able to extend its winning streak with the boost in sentiment from a preliminary U.S.-China trade deal

NASDAQ Composite (.IXIC) able to extend its winning streak with the boost in sentiment from a preliminary U.S.-China trade deal

NASDAQ Composite (.IXIC) able to extend its winning streak with the boost in sentiment from a preliminary U.S.-China trade deal

U.S. stocks finished mixed Wednesday as only the Nasdaq Composite was able to extend its winning streak with the boost in sentiment from a preliminary U.S.-China trade deal tailing off by the end of the session.

The likely impeachment of President Trump by the U.S. House of Representatives in Washington later Wednesday held little risk for investors, analysts noted. What are major indexes doing?

The Dow Jones Industrial Average (DJIA) fell 27.88 points, 0.1%, to close at 28,239.28, while the S&P 500 (SPX) shed 1.38 points, less than 0.04%, to finish at 3,191.14. The Nasdaq Composite Index (COMP)  was up 4.38 points, less than 0.05%, to end at 8.827.73, a new record close.

The Nasdaq saw its fifth consecutive record close, the longest record streak since January 2018.

Major indexes scored their fifth straight gain Tuesday, with all three logging the latest in a series of record finishes, albeit after modest gains. The Dow on Tuesday rose 31.27 points, or 0.1%, to end at 28,267.16, while the S&P 500 eked out a gain of 1.07 points, or less than 0.1%, to finish at 3,192.52. The Nasdaq Composite closed at 8823.36 after a gain of 9.13 points, or 0.1%. What’s driving the market?

The U.S. – China trade deal announced Friday has provided intermittent support for equities this week, as it partially rolls back some existing tariffs on Chinese imports and scraps plans for additional levies ahead of a Dec. 15 deadline. While it could benefit American farmers, skepticism lingers over the targets set by U.S. negotiators.

“In the absence of fresh details on the terms of the deal or when it is expected to be signed, there was some nervousness in the markets,” said Raffi Boyadjian, senior investment analyst at XM, in a note. “However, even without any new drivers, the injection of positive sentiment from the announcement of the deal is likely to be enough to last till the end of the year as trading winds down during the Christmas and New Year period.”

In an interview with Fox Business on Tuesday, Robert Lighthizer, the U.S. Trade Representative, also suggested the Trump administration was ready to escalate its trade confrontation with the EU, potentially through new tariffs, after sealing a truce with China and enacting the USMCA agreement with Canada and Mexico to replace NAFTA.

Meanwhile, investors appeared less gloomy over global economic prospects. A gauge of German business sentiment, the Ifo business-climate index, came in at a stronger-than-expected 96.3 points Wednesday morning, rising from an upwardly revised 95.1 in November and topping forecasts for a reading of 95.5.

While stocks are supported by the partial resolution of the U.S. – China trade war this week, the Federal Reserve is also greasing the wheels of the rally by providing extra liquidity for banks. The U.S. central bank’s efforts to restore calm to financial markets in the aftermath of a sudden spike in short-term borrowing costs in mid-September has proven to be successful, said New York Fed President John Williams on Wednesday.

Technical Indicators

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 8,444.60.

The projected upper bound is: 8,992.71.

The projected lower bound is: 8,702.92.

The projected closing price is: 8,847.81.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 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 92.3603. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 12 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 72.36. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 12 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 136.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 12 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 buy 3 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed up 4.378 at 8,827.735. Volume was 28% above average (neutral) and Bollinger Bands were 16% narrower than normal.

Open     High      Low     Close     Volume___
8,834.6488,848.7608,820.4168,827.735 680,419,008
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 8,703.68 8,430.77 8,056.27
Volatility: 8 11 18
Volume: 565,376,320 525,359,104 551,527,744

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

NASDAQ COMPOSITE is currently 9.6% 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 .IXIC at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .IXIC and have had this outlook for the last 43 periods. Our momentum oscillator is currently indicating that .IXIC is currently in an overbought condition.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.