NASDAQ Composite (.IXIC) Gives up Early Gains on Trade Fight Worries
A strong opening stock rally Thursday faded in the afternoon in part because of worries about the upcoming U.S.-China trade talks.
The concern was prompted when Michael Pillsbury, a prominent adviser to President Donald Trump, told the South China Morning Post that Trump would raise tariffs substantially on Chinese imports unless a trade agreement can be quickly negotiated.
Formal talks between the United States and China are supposed to resume in October.
The S&P 500 finished flat on the day. It had been up as much as 0.5%. The Dow Jones industrials were down 0.2% after rising as many as 125 points. The Nasdaq Composite ended up 0.7%; the index had been up as much as 0.7%.
Apple (NASDAQ:AAPL), Boeing (NYSE:BA) and Walt Disney (NYSE:DIS) all pulled the Dow lower. Apple and Costco Wholesale (NASDAQ:COST) were among the big reasons for the swoon in the Nasdaq, as well as the Nasdaq 100.
Boeing’s decline may have been prompted by Ryanair Holdings (NASDAQ:RYAAY) CEO Michael O’Leary’s projection the airline won’t resume flying the 737 Max until late February or early March.
Microsoft (NASDAQ:MSFT) hit a 52-week high before falling back. The software giant announced late Wednesday it was boosting its dividend by 11% and planning to buy back up to $40 billion of its shares. Microsoft’s market capitalization stood at $1.085 trillion, ahead of Apple’s $1 trillion market cap.
Also weighing on stocks was uncertainty over whether the Federal Reserve will cut rates again in 2019. The Fed cut its key federal funds rate to 1.75% to 2% on Wednesday to protect the 10-year-old economic expansion from trade stresses and economic slowing in Europe, China and elsewhere.
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 8,007.79.
The projected upper bound is: 8,466.85.
The projected lower bound is: 7,898.12.
The projected closing price is: 8,182.49.
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 23 white candles and 27 black candles for a net of 4 black candles.
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).
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 62.0547. This is not an overbought or oversold reading. The last signal was a sell 3 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 58.31. 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 75 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 89. This is not a topping or bottoming area. The last signal was a sell 4 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 buy 14 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed up 5.487 at 8,182.879. Volume was 11% below average (neutral) and Bollinger Bands were 1% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 8,151.54 8,061.44 7,667.94
Volatility: 7 23 24
Volume: 530,129,440 532,220,384 573,218,304
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 6.7% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 9 periods.