NASDAQ Composite (.IXIC) Beige Book shows waning optimism in some districts
U.S. stocks rose for a second straight session Wednesday as investors cheered mostly positive earnings from financial institutions such as Goldman Sachs Group and Bank of America Corp. even as Wall Street continued to deal with uncertainty from a partial government shutdown.
How did major benchmarks fare?
The Dow Jones Industrial Average DJIA, +0.59% rose 141.57 points, or 0.6%, to 24,207.16, while the S&P 500 index SPX, +0.22% climbed 5.80 points, or 0.2%, to 2,616.10. The Nasdaq Composite Index NQH9, -0.56% advanced 10.86 points, 0.2%, to 7,034.69.
What drove the market?
Investors were cheered by quarterly results from Goldman Sachs Group Inc. GS, -0.90% which produced earnings and profits that topped expectations on the back of healthy mergers and acquisitions.
Solid fourth-quarter results supported by healthy demand for loans from Bank of America Corp. BAC, +7.16% also bolstered market sentiment.
In the early innings of the earnings season, corporations have communicated their confidence in domestic expansion via their outlooks. That trend continued Wednesday after Bank of America Chief Executive Brian Moynihan said in a statement accompanying the earnings release that “we see a healthy consumer and business climate driving a solid economy.”
This upbeat view was supported by the Beige Book, which showed eight out of 12 Federal Reserve districts reporting modest to moderate growth. However, the degree of optimism appears to be waning, in part due to financial-market volatility and rising interest rates.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 7,414.71.
The projected lower bound is: 6,638.70.
The projected closing price is: 7,026.71.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.
A doji star occurred (where a doji gaps above or below the previous candle). This often signals a reversal with confirmation occurring on the next bar.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 4 rising windows in the last 50 candles–this makes the current rising window even more bullish.
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 75.7866. This is not an overbought or oversold reading. The last signal was a sell 0 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 56.77. 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 buy 14 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 102.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. 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 buy 10 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed up 10.859 at 7,034.693. Volume was 18% below average (neutral) and Bollinger Bands were 31% wider than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 6,880.19 6,989.26 7,450.14
Volatility: 34 36 25
Volume: 568,566,016 625,520,448 555,579,136
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.
NASDAQ COMPOSITE gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
NASDAQ COMPOSITE is currently 5.6% below its 200-period moving average and is in an upward trend. Volatility is high 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 5 periods.
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