NASDAQ Composite (.IXIC) falls as Fed expected to cut interest rates by 25 basis points
Wall Street’s main indexes have fallen following a report the Federal Reserve plans to cut interest rates by only a quarter percentage point at the end of the month.
The benchmark S&P 500 on Friday erased earlier marginal gains after a Wall Street Journal report on the Fed’s plans.
According to the report, while the US central bank is not prepared to make a bigger 50-basis-point cut, it may make further rate cuts in the future given concerns about a decline in global economic growth and uncertainty about trade.
On Thursday, stocks had risen as comments from New York Fed president John Williams increased hopes of a bigger rate cut. Later that day, however, a New York Fed representative said Williams’ comments were not intended to telegraph any hints about upcoming Fed policy actions.
The Dow Jones Industrial Average .DJI fell 68.77 points, or 0.25%, to 27,154.2, the S&P 500 .SPX lost 18.5 points, or 0.62%, to 2,976.61 and the Nasdaq Composite .IXIC dropped 60.75 points, or 0.74%, to 8,146.49.
For the week, the Dow lost 0.64%, the S&P fell 1.23% and the Nasdaq shed 1.19%.
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 7,937.44.
The projected upper bound is: 8,386.47.
The projected lower bound is: 7,914.63.
The projected closing price is: 8,150.55.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with NASDAQ COMPOSITE). It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 27.5381. This is not an overbought or oversold reading. The last signal was a sell 2 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 56.60. 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 32 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 14. This is not a topping or bottoming area. The last signal was a sell 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 sell 1 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed down -60.754 at 8,146.489. Volume was 8% below average (neutral) and Bollinger Bands were 16% 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: 8,190.27 7,887.39 7,525.10
Volatility: 10 19 26
Volume: 489,779,872 566,489,856 591,498,240
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 8.3% above its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 23 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.
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