NASDAQ Composite (.IXIC) Climb on Tentative Brexit Deal, Solid Earnings
A positive opening today for the markets following decent enough economic data. Earnings, trade talks and a tentative Brexit deal are also positives today helping lift equities.
Wednesday, stocks closed mixed to slightly lower with small caps outpacing their large cap brethren. The Russell 2000 finished higher by 0.12%, the S&P 500 down 0.2%, the Dow was off 0.08% or 23 points and the Nasdaq faired the worse of the major indexes down 0.30% led lower by Tech. Equity trading volumes yesterday were still below average showing a continued lack of investor conviction, which is an ongoing theme.
Currently 10 of 11 major S&P 500 sectors are trading higher. Healthcare and Industrials lead the way higher both up over ¾ of a percent while Tech continues to lag. Crude oil and Gold both trade slightly lower. The dollar also trades lower while the yield on the 10-yr stands at 1.77%.
Unemployment numbers released by the U.S. Department of Labor continue to show demand in the U.S. and a continued bright spot for the economy. Reported Initial Jobless Claims were relatively in-line with expectations at 214,000. Reported Continuing Claims were also a little worse, but still in-line with consensus at 1.679 million claims.
The Federal Reserve’s Beige Book report yesterday afternoon said the U.S. economy was growing “at a slight to modest pace.” Some of those surveyed lowered their outlook for growth over the coming year citing trade issues and global growth as a hindrance. The Fed said “Household spending was solid on balance: non-auto retail sales increased modestly, while light vehicle sales were generally robust.” However business spending continued to slow with nonresidential construction growing “at a slightly slower yet still modest pace, while leasing activity advanced at a slow but steady rate. Manufacturing activity continued to edge lower.” All in all the report shows the US economy continuing to grow, but at a slower pace which is in-line with the recent economic data and on par with the theme of a global slowing economy.
The next FOMC meeting is in two weeks and the Fed Fund Futures predict an 85% chance of rate cut, consistent with yesterday morning’s numbers.
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 8,001.62.
The projected upper bound is: 8,440.37.
The projected lower bound is: 7,885.10.
The projected closing price is: 8,162.73.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 25 white candles and 25 black 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 87.7871. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 16 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 57.84. 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 95 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 129.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 6 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 4 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed up 32.669 at 8,156.853. Volume was 11% below average (neutral) and Bollinger Bands were 19% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 8,015.24 7,999.52 7,787.20
Volatility: 18 22 20
Volume: 457,945,024 532,148,000 559,261,312
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 is currently 4.7% above its 200-period moving average and is in an upward trend. Volatility is 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 0 periods.