NASDAQ Composite (.IXIC) close at new records after Trump minimizes Iran strikes
U.S. stocks recovered from overnight losses to post solid gains, with the Nasdaq notching a new record close, after remarks by President Trump suggested the U.S. and Iran were refraining from further military action following attacks on U.S. bases overnight, in retaliation for last week’s killing of Maj. Gen. Qassem Soleimani by American forces.
However, the Dow’s gains were somewhat restrained by a fall in Boeing shares after one of the planemaker’s jets operated by Ukraine International Airlines crashed shortly after takeoff from Tehran on Wednesday.
The S&P set a new intraday record Wednesday, while the Nasdaq set both record intraday high and close.
What’s driving the market?
Investor sentiment was buoyed following remarks by President Trump, who responded to Tuesday night’s attacks by Iran by minimizing their importance, saying that no U.S. casualties were sustained and that only ‘minimal’ damage was done to U.S. military facilities in Iraq.
“Iran appears to be standing down, which is a good thing for all parties involved, and a very good thing for the world,” the president said during an address from the White House Wednesday morning.
The President did say, however, that he was imposing further economic sanctions on Iran, while stating categorically that “As long as I’m President of the United States, Iran will never be allowed to have a nuclear weapon,” hinting at the possibility of further U.S. strikes in the wake of an announcement by Iran that it had surpassed the limits on stockpiles of low-enriched uranian set by the 2015 nuclear deal which President Trump abandoned.
Mideast tensions were in focus after Iran delivered what is being described as a measured response to the killing of a top general by the American forces last Friday. Iranian Supreme Leader Ayatollah Ali Khamenei vowed further retaliation for the U.S.’s killing of Soleimani, hours after striking military bases in Iraq that house U.S. forces, The Wall Street Journal reported.
Tehran’s military response, firing more than a dozen missiles at U.S. military bases in Iraq at Al Asad and Erbil, briefly rattled financial markets in after-hours trade, but the moves in stocks, bonds, and commodities quickly moderated as investors reassessed the chances of a broader conflict.
Fears were tempered by tweets from Iran’s foreign minister, Javad Zarif, who said via Twitter that Iran didn’t seek further escalation, but would “defend ourselves against any aggression.”
“Markets initially reacted [to the attacks] in classic risk-off fashion, with Asian stock markets getting hammered and Wall Street futures falling sharply, as safe havens such as the Japanese yen and gold roared higher,” wrote Marios Hadjikyriacos Investment Analyst at XM, in a Wednesday note.
“Yet, these moves retraced in the following hours,” he added. “Much of this market serenity is owed to both sides signaling they don’t want to escalate matters any further.”
Meanwhile, investors parsed U.S. private-sector employment data from payroll firm Automatic Data Processing Inc., which estimated that employers added 202,000 new jobs in December, above the 157,000 expected by analysts polled by Econoday.
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 8,715.55.
The projected upper bound is: 9,286.88.
The projected lower bound is: 9,007.05.
The projected closing price is: 9,146.96.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.
If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with NASDAQ COMPOSITE), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.
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 85.3536. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 1 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 73.33. 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 3 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 143.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 3 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 16 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed up 60.661 at 9,129.242. Volume was 9% above average (neutral) and Bollinger Bands were 26% wider 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: 9,028.27 8,665.67 8,145.34
Volatility: 12 10 18
Volume: 523,722,624 563,150,336 548,996,224
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 12.1% 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 very strong flows of volume into .IXIC (bullish). Our trend forecasting oscillators are currently bullish on .IXIC and have had this outlook for the last 56 periods. Our momentum oscillator is currently indicating that .IXIC is currently in an overbought condition. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.
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