NASDAQ Composite (.IXIC) falls as Apple, health shares drag
US stocks pulled back on Monday from near-record levels, as Apple and healthcare shares fell and investors braced for a busy week of political and economic news, including a potential turning point in the US-China trade dispute.
Wall Street is focused on December 15, when the next round of US tariffs on Chinese imports is scheduled to take effect. China said on Monday that it hoped to make a trade deal with the United States as soon as possible.
Investor hopes of at least an initial US-China agreement have helped push major stock indexes to record highs, with the benchmark S&P 500 hovering about 0.5 per cent below its all-time high.
“The market is … in a little bit of a wait-and-see mode,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.
“All eyes are still on what is going to happen with the tariff situation come December 15th,” Carlson said. “That’s still the biggest near-term factor that is probably going to influence trading.”
Aside from improved investor sentiment over trade, the US Federal Reserve’s interest rate cuts earlier this year and some relief over corporate profits have helped drive the S&P 500 up 25 per cent so far in 2019.
This week, investors also will focus on the Fed’s policy meeting, an election in the United Kingdom, and potential agreement related to a North American trade pact.
On Monday, the Dow Jones Industrial Average fell 105.46 points, or 0.38 per cent, to 27,909.6, the S&P 500 lost 9.94 points, or 0.32 per cent, to 3,135.97 and the Nasdaq Composite dropped 34.70 points, or 0.4 per cent, to 8,621.83.
A 1.4 per cent decline in shares of Apple, which are often sensitive to trade developments, was the biggest single stock drag on all three indexes.
Most of the S&P 500 sectors were lower, with tech and healthcare weighing the most on the index.
In company news, Merck & Co said it would buy cancer drug developer ArQule Inc for $2.7 billion, causing shares of ArQule to double in value. Merck shares dipped 0.1 per cent.
Shares of industrial conglomerate 3M Co dropped 1.0 per cent after Citigroup cut its rating on the stock to “neutral” from “buy.”
Declining issues outnumbered advancing ones on the NYSE by a 1.02-to-1 ratio; on Nasdaq, a 1.34-to-1 ratio favoured decliners.
The S&P 500 posted 25 new 52-week highs and one new low; the Nasdaq Composite recorded 93 new highs and 59 new lows.
About 6.2 billion shares changed hands in US exchanges, below the 6.6 billion-share daily average over the last 20 sessions.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 8,815.62.
The projected lower bound is: 8,455.32.
The projected closing price is: 8,635.47.
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.
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 73.0803. This is not an overbought or oversold reading. The last signal was a sell 5 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 60.37. 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 5 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 63. This is not a topping or bottoming area. The last signal was a sell 5 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 5 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed down -34.702 at 8,621.827. Volume was 2% above average (neutral) and Bollinger Bands were 44% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 8,615.54 8,313.57 8,014.79
Volatility: 14 14 18
Volume: 539,805,952 516,512,800 552,664,704
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 7.6% above its 200-period moving average and is in an upward 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 bullish on .IXIC and have had this outlook for the last 36 periods.
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