NASDAQ Composite (.IXIC) falls as CSX results point to damage from trade tensions

NASDAQ Composite (.IXIC) falls as CSX results point to damage from trade tensions

NASDAQ Composite (.IXIC) falls as CSX results point to damage from trade tensions

U.S. stock indexes dipped on Wednesday as weak results from CSX Corp stoked concerns that the protracted trade war between the United States and China could hurt corporate earnings.

CSX CSX.O shares tumbled 9.9% and were set for their biggest one-day drop since 2008 after the rail freight company posted lower-than-expected quarterly profit and cut its full-year revenue forecast. Ongoing trade tensions have contributed to a decline in truck and rail freight volumes in the first half of 2019.

The losses in CSX shares helped push down the S&P 500 industrials index .SPLRCI , whose 1.9% slide was the largest among the S&P’s 11 major sectors. The Dow Jones Transportation Average .DJT fell 3.2%.

The Federal Reserve’s Beige Book, a compendium of anecdotes from U.S. businesses, also pointed to trade-related pressures on transportation and manufacturing companies.

Despite a pause on additional U.S. tariffs on Chinese goods,”none of the underlying issues have really been put to bed,”said Ed Campbell, portfolio manager and managing director at QMA in Newark, New Jersey. “It’s a risk factor that could come back at any time.”

Indeed, on Tuesday, President Donald Trump said he could impose tariffs on additional Chinese goods at any time.

But persistent trade-related concerns are a critical factor supporting expected interest-rate cuts from the Federal Reserve later this month, Campbell said. The anticipation of rate cuts has helped propel U.S. stocks to new highs in the past week.

“One of the things Trump is doing with trade is he’s using it as a cudgel against the Fed,” he said. “The Fed is citing uncertainty relating to trade as a reason they’re open to cutting rates.”

The Dow Jones Industrial Average .DJI fell 67.45 points,or 0.25%, to 27,268.18, the S&P 500 .SPX lost 11.8 points, or 0.39%, to 2,992.24 and the Nasdaq Composite .IXIC dropped 13.76 points, or 0.17%, to 8,209.03.

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 7,932.15.

The projected upper bound is: 8,430.78.

The projected lower bound is: 7,942.11.

The projected closing price is: 8,186.44.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

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 68.0277. This is not an overbought or oversold reading. The last signal was a sell 0 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 61.13. 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 30 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 58. This is not a topping or bottoming area. The last signal was a sell 1 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 27 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed down -37.591 at 8,185.206. Volume was 16% below average (neutral) and Bollinger Bands were 14% narrower than normal.

Open High Low Close Volume___
8,223.9958,230.6698,184.6588,185.206 473,279,712

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period     50-period     200-period
Close: 8,188.10 7,878.46 7,523.75
Volatility: 10 20 26
Volume: 472,447,584 569,860,352 592,194,944

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 8.8% above its 200-period moving average and is in an upward trend. Volatility is low 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 bullish on .IXIC and have had this outlook for the last 21 periods.

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