NASDAQ Composite (.IXIC) continuing trade tensions pulled industrial and tech shares down
Wall Street ended lower as continuing trade tensions pulled industrial and tech shares down, and the Dow capped a fourth straight week of losses in its longest weekly losing streak in three years.
While all three major US indexes struggled for direction for much of Friday’s session, they turned decisively negative following a report from CNBC that US-China trade negotiations have stalled.
The S&P 500 and the Nasdaq suffered their second successive weekly declines after US stocks failed to fully recover from Monday’s steep sell-off.
Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, said it was not unusual for stocks to weaken at the end of the week.
“The possibility of something weird happening over the weekend leads people to take money off the table as the week comes to a close,” he said.
China added fuel to the fire of the increasingly rancorous trade war with the US, striking a more aggressive tone and suggesting further talks could be fruitless unless Washington changes course.
Elsewhere in the multi-front US tariff war, President Donald Trump confirmed he would delay imposing imported auto tariffs by as much as six months, and agreed to lift metal tariffs on Canada and Mexico.
Trade headlines overshadowed upbeat economic data. The University of Michigan’s consumer sentiment index jumped 5.3 per cent in May to its highest reading in 15 years.
“After earnings season the market seems to shift to these macro factors that are difficult to predict and difficult to trade on,” Tuz said.
“You see more whipsawing in the markets in this kind of environment.”
Tariff jitters also dragged on key industrial shares.
Farm equipment maker Deere & Co was the biggest percentage loser on the S&P 500, dipping 7.7 per cent after cutting its full-year forecast.
Caterpillar, 3M, Textron, General Dynamics and Fedex all helped pull the industrial sector 1.1 per cent lower.
The Dow Jones Industrial Average fell 98.68 points, or 0.38 per cent, to 25,764, the S&P 500 lost 16.79 points, or 0.58 per cent, to 2859.53 and the Nasdaq Composite dropped 81.76 points, or 1.04 per cent, to 7816.29.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 8,046.78.
The projected lower bound is: 7,601.58.
The projected closing price is: 7,824.18.
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 29 white candles and 21 black candles for a net of 8 white candles.
An inverted hammer occurred. If this occurs during a downtrend (which appears to be the case with NASDAQ COMPOSITE) it implies a reversal. Look for a confirmation of the reversal on the bar.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
A shooting star occurred (a shooting star has a small real body near the bottom of the candle and a long upper shadow). During an uptrend the long upper shadow indicates that the bears are gaining control and a top may occur.
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 67.9800. This is not an overbought or oversold reading. 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 44.34. 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 sell 13 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 -46. This is not a topping or bottoming area. The last signal was a buy 2 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 sell 12 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed down -81.761 at 7,816.285. Volume was 3% above average (neutral) and Bollinger Bands were 13% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 7,877.59 7,869.19 7,533.19
Volatility: 26 18 25
Volume: 569,200,512 563,518,272 581,854,400
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 3.8% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 6 periods.