NASDAQ Composite (.IXIC) concerns U.S. companies will report a decline in earnings for the first time in three years
A gauge of global equities was mostly flat on Monday as another drop in Boeing shares and concerns U.S. companies will report a decline in earnings for the first time in three years were offset by rising crude prices that lifted oil shares.
Oil prices rose to their highest since November, driven by fighting in Libya along with ongoing supply cuts pledged by the Organization of the Petroleum Exporting Countries and U.S. sanctions against Iran and Venezuela.
West Texas Intermediate, the U.S. benchmark, gained more than 2% while global benchmark Brent rose over 1%, lifting the energy components of the FTSE 100 index in London and the S&P 500 on Wall Street.
BP Plc and Royal Dutch Shell Plc contributed the most upside in London, while Exxon Mobil was a big gainer on Wall Street.
But U.S. stocks retreated from the S&P 500’s seven-day winning streak as investors braced for what could be the first decline in corporate profits since 2016 as the quarterly reporting of earnings begins in earnest at the end of the week.
The earnings season will pit negative profit expectations against this year’s stock rally, said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
“The market is going to struggle to continue to find catalysts to move at this pace. It’s been a great start and a lot of good news already priced into the stock market,” Arone said, referring to the S&P 500’s 15 percent gain year-to-date.
If earnings are better than expected and are positive, that could give stocks more upside, especially if the U.S.-China trade war is resolved and economic data remains solid, he said.
On Wall Street, the Dow Jones Industrial Average fell 118.9 points, or 0.45%, to 26,306.09. The S&P 500 lost 1.89 points, or 0.07%, to 2,890.85 and the Nasdaq Composite added 1.30 points, or 0.02%, to 7,939.99.
Boeing Co fell 4.8% after the company said it would cut production of its 737 MAX aircraft in response to a worldwide grounding of the jets in the wake of the fatal Ethiopian Airlines crash on March 10.
Boeing’s woes weighed on its suppliers. Spirit AeroSystems and Triumph Group fell 6.91% and 5.87%, respectively.
France’sSafran SA, which provides Boeing with engines for the 737 in a joint venture with General Electric Co, slid 2%.
GE fell 6.9% after JPMorgan downgraded the company’s stock to “underweight” from “neutral.”
Here is Shayne ‘Jack’ Heffernan’s discretionary market outlook:
The U.S. stock market’s long term risk:reward is no longer bullish . In a most optimistic scenario, the bull market probably has 1 year left. Long term risk:reward is more important than trying to predict exact tops and bottoms.
The medium term direction (e.g. next 6-9 months) is mostly mixed, although there is a bullish lean.
In summary, 12-24 months = bearish, 12 months = neutral, 6-9 months = slightly bullish.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 8,155.69.
The projected lower bound is: 7,783.63.
The projected closing price is: 7,969.66.
A white body occurred (because prices closed higher 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 31 white candles and 19 black candles for a net of 12 white 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 90.9889. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 13 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 71.14. 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 11 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 111.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 11 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 15.192 at 7,953.884. Volume was 18% below average (neutral) and Bollinger Bands were 33% 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: 7,809.09 7,546.49 7,494.64
Volatility: 9 16 25
Volume: 542,160,768 587,100,992 579,573,120
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 6.1% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect moderate flows of volume into .IXIC (mildly bullish). Our trend forecasting oscillators are currently bullish on .IXIC and have had this outlook for the last 61 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.