NASDAQ Composite (.IXIC) gives up gains on news of troubled trade talks
The benchmark S&P 500 index ended little changed on Tuesday as investor optimism regarding the Federal Reserve’s expected affirmation of its dovish policy stance was offset by reports of fault lines emerging in ongoing U.S.-China trade negotiations.
Financial stocks weighed on all three major U.S. stock indexes, which gave up early gains following a Bloomberg report that China is pushing back against American demands in trade talks.
“Trade fear has reared its head again with Trump administration concerns (that) China is walking back some of the pledges they’ve made in negotiations so far,” said Chris Zaccarelli, chief investment officer at Alliance in Charlotte, NC.
Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama, agreed.
“China seems to be balking on some of the terms of the trade negotiations,” Hellwig said. “And to me it sounds like there may be nervousness ahead of the Fed announcement.”
As the Fed convened its two-day policy meeting, investors expected little change in its measured approach to interest rate hikes.
Its summary of economic projections – or “dot plot” – due for release on Wednesday, will be closely scrutinized for clues regarding the extent of the central bank’s patience.
But some analysts question whether the dot plot deserves this level of scrutiny.
“The dot plot is consistently higher than where rates turned out to be, so the credibility hasn’t been that good,” Hellwig said. “But it gives insight was to what the members of the FOMC are thinking.”
A report from the U.S. Commerce Department showed a smaller-than-expected increase in factory orders, the latest in a string of underwhelming economic data that has supported the Fed’s more accommodative stance.
The Dow Jones Industrial Average fell 26.72 points, or 0.1 percent, to 25,887.38, the S&P 500 lost 0.37 points, or 0.01 percent, to 2,832.57 and the Nasdaq Composite added 9.47 points, or 0.12 percent, to 7,723.95.
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 7,357.62.
The projected upper bound is: 7,925.08.
The projected lower bound is: 7,562.22.
The projected closing price is: 7,743.65.
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 32 white candles and 18 black candles for a net of 14 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 84.3585. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 6 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 69.18. 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 56 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 136.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 6 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 2 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed up 9.468 at 7,723.946. Volume was 3% above average (neutral) and Bollinger Bands were 51% 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: 7,588.59 7,330.22 7,487.89
Volatility: 16 16 25
Volume: 668,407,168 588,094,592 579,929,728
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 3.2% 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 47 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.