NASDAQ Composite (.IXIC) continue to hit record highs

NASDAQ Composite (.IXIC) continue to hit record highs

NASDAQ Composite (.IXIC) continue to hit record highs

It’s the market that continues mostly upward, even though there’s still plenty to worry about.

The Dow Jones industrial average and the Nasdaq closed at record highs yet again Tuesday, and the S&P 500 closed barely below the all-time high it reached a day earlier.

The gains in recent weeks have been driven by company earnings that haven’t been nearly as terrible as Wall Street was expecting, interest rate cuts, hopes for a trade truce and a steadily growing economy. In all, the S&P 500 is up 22.7% so far this year, putting it on pace for its best year since 2013.

The upbeat mood marks a pivot from the summer, when worries about trade, Britain’s potentially messy exit from the European Union and the slowing global economy loomed over the market.

Wall Street got through the bulk of third-quarter earnings season last week, and the results were much better than what investors had been anticipating.

As of Friday, 71% of the members of the S&P 500 index have reported their results, and 76% of them have been better than forecast, according to FactSet. Also, 61% have reported higher than expected sales, which is important in the wake of concerns about an economic slowdown and the U.S.-China trade war.

This doesn’t mean earnings have been stellar. Expectations were low this quarter, and on a whole, profits in the S&P 500 are down 2.7% from a year ago, according to FactSet. But since companies are beating investors’ mediocre expectations, it’s provided the market with a base on which to rally upon.

The U.S. economy has repeatedly defied fears of a recession, which had resurfaced in late summer and early fall as trade tensions escalated. Reports on jobs, growth and consumer confidence in the past couple of weeks have pointed to an economy that is overcoming global threats and expanding for a record-long 11th straight year.

The government also said last week that the nation’s gross domestic product, the broadest gauge of economic growth, expanded at a 1.9% annual rate in the July-September quarter. Though sluggish, that figure was roughly in line with the average annual growth throughout the expansion that began in 2009. It suggested that the economy remains resilient.

And on Tuesday, an index that measures growth in the economy’s vast service sector — made up of industries ranging from restaurants to banking to health care — rose in October to show solid expansion after having touched a three-year low in September.

With recent signs of a thaw in the trade war between the Trump administration and China and lessening fears of a hasty and disorderly exit by the United Kingdom from the European Union, it’s possible that U.S. companies will soon resume investing in machinery, computers and other equipment to expand their businesses. That would provide another source of growth for the U.S. economy, in addition to the consumer spending that has nearly alone driven the expansion for the past six months.

In Tuesday’s trading, the Dow climbed 30.52 points, or 0.1%, to 27,492.63, the S&P 500 fell 3.65 points, or 0.1 percent, to 3,074.62 and the Nasdaq composite rose 1.48 points, or less than 0.1%, to 8,434.68.

The price of U.S. crude oil rose 69 cents to settle at $57.23 a barrel. Brent crude, the international standard, rose 83 cents to $62.96 a barrel. Wholesale gasoline rose 1 cent to $1.67 per gallon.

Gold fell $27.20 to $1,480.80 per ounce, silver fell 49 cents to $17.52 per ounce and copper fell 3 cents to $2.70 per pound.

The dollar rose to 109.24 Japanese yen from 108.64 yen on Tuesday. The euro weakened to $1.1065 from $1.1127.

Technical Indicators

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 8,107.78.

The projected upper bound is: 8,650.61.

The projected lower bound is: 8,241.99.

The projected closing price is: 8,446.30.

Candlesticks

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 27 white candles and 23 black candles for a net of 4 white candles.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 92.7708. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 3 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 67.56. 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 108 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 128.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 12 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 17 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed up 1.479 at 8,434.680. Volume was 6% above average (neutral) and Bollinger Bands were 17% wider than normal.

Open     High      Low     Close     Volume___
8,446.6228,457.3948,421.0538,434.680 559,516,672
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 8,300.22 8,089.03 7,873.67
Volatility: 10 16 19
Volume: 508,705,024 524,542,976 554,903,936

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.

Summary

NASDAQ COMPOSITE is currently 7.1% 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 13 periods.

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