NASDAQ Composite (.IXIC) confusion surrounding a possible resolution to U.S.-China trade deal
Markets ended lower on Friday following a three-day rally on confusion surrounding a possible resolution to U.S.-China trade spat in the near term. Also, Apple’s shares declined following a disappointing forecast, which took a toll on the broader tech sector as investors felt jittery. This saw all three major indexes ending in negative territory.
The Dow Jones Industrial Average (DJI) declined 0.4% to close at 25,270.83. The S&P 500 fell 0.6% to close at 2,723.06. The Nasdaq Composite Index closed at 7,356.99, declining 1%. A total of 8.9 billion shares were traded on Friday, higher than the last 20-session average of 8.8 billion shares. Decliners outnumbered advancers on the NYSE by a 1.29-to-1 ratio. On Nasdaq, a 1.07-to-1 ratio favored declining issues.
Trade disputes have been taking a toll on markets ever since the United States and China engaged in tit-for-tat tariffs. On Friday, investors dealt with a range of contradictory reports on a possible resolution to U.S. China trade disputes. Earlier in the day, President Donald Trump’s top economic advisor Larry Kudrow said the United States and China were far from reaching a trade deal.
This dented investors’ confidence, leading to huge selloffs. However, the initial losses were somewhat pared after President Donald Trump said that progress was being made on U.S.-China trade talks.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 7,649.88.
The projected upper bound is: 7,630.85.
The projected lower bound is: 7,002.17.
The projected closing price is: 7,316.51.
A black body occurred (because prices closed lower 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 21 white candles and 29 black candles for a net of 8 black candles.
A hammer occurred (a hammer has a long lower shadow and closes near the high). Hammers must appear after a significant decline or when prices are oversold (which appears to be the case with NASDAQ COMPOSITE) to be valid. When this occurs, it usually indicates the formation of a support level and is thus considered a bullish pattern.
A hanging man occurred (a hanging man has a very long lower shadow and a small real body). This pattern can be bullish or bearish, depending on the trend. If it occurs during an uptrend it is called a hanging man line and signifies a reversal top. If it occurs during a downtrend (which appears to be the case with NASDAQ COMPOSITE) it is called a bullish hammer.
A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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 83.6356. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 7 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 44.03. 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 7 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 -15. This is not a topping or bottoming area. The last signal was a buy 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 2 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed down -28.143 at 7,328.851. Volume was 4% above average (neutral) and Bollinger Bands were 45% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 7,266.92 7,745.62 7,519.05
Volatility: 41 27 23
Volume: 687,847,168 605,324,096 541,923,456
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 2.5% below its 200-period moving average and is in an downward 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 bearish on .IXIC and have had this outlook for the last 22 periods.