NASDAQ Composite (.IXIC) Fed meeting starting on Tuesday
The NASDAQ was being scrappy all week as the beleaguered tech space sporadically showed signs of life. But today it slipped 2.26% (or nearly 160 points) to 6910.67. The index declined about 0.8% this week.
Weaker-than-expected economic data from China and Europe completely overshadowed positive retail data here in the U.S., which bodes well for the holiday season. And President Trump tweeted that “China wants to make a big and very comprehensive deal. It could happen, and rather soon!”
But the market was having none of it on Friday. It wants some real movement on the trade issues. Tweets aren’t working anymore.
The big news next week will be the Fed meeting starting on Tuesday. Fed Chair Powell and Friends are still expected to hike rates for the fourth time this year. But what about next year? We’ve heard some dovish sentiment of late amid this correction, so the market will be paying close attention to the language for any additional signs that future increases may be delayed. A Santa Claus Rally in the final week of 2018 may just depend on what these folks have to say.
And let’s not forget that this skittish market can react dramatically to any headline that comes our way. Let’s get ready for another choppy week heading into the holiday.
Today’s Portfolio Highlights:
TAZR Trader: With the market remaining under pressure even in the historically strong month of December, Kevin felt it was time to “start training our ‘short’ muscles for the increased volatility”. On Friday, the editor initiated two small test positions by shorting retailer Dillard’s (DDS) and amusement park operator Six Flags (SIX). Both of these stocks are Zacks Rank 5s (Strong Sells) after disappointing quarters that included negative earnings surprises and lowered guidances.
Meanwhile, with Micron set to report earnings next Tuesday, Kevin also added a 10% position in Direxion Semiconductor 3X Bear ETF (SOXS). Basically, as goes MU, so goes the semiconductors. Shares and earnings estimates for the stock are heading lower, and the editor plans to capitalize on the weakness with this bearish move. Read the complete commentary for specifics on these moves and a look at MU’s chart.
Overall, the bias in prices is: Downwards
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 7,290.03.
The projected lower bound is: 6,486.73.
The projected closing price is: 6,888.38.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.
A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 5 falling windows in the last 50 candles–this makes the current falling window even more bearish. The two candles preceding the falling window were black, which makes this pattern even more bearish.
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 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 45.5534. This is not an overbought or oversold reading. The last signal was a buy 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 39.47. 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 34 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 -116.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 7 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 3 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed down -159.669 at 6,910.665. Volume was 3% below average (neutral) and Bollinger Bands were 9% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 7,121.96 7,298.16 7,511.05
Volatility: 34 35 24
Volume: 643,137,280 623,457,472 548,086,080
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 gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
NASDAQ COMPOSITE is currently 8.0% below its 200-period moving average and is in an downward trend. Volatility is high 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 bearish on .IXIC and have had this outlook for the last 3 periods.