NASDAQ Composite (.IXIC) Global Economic Slowdown
While markets ended Friday’s session slightly down, the overall week finished in positive territory despite a Government shutdown that enters day 24. The Dow Jones Industrial Average closed down about 6 points lower, or less than 0.1%, at 23,995, the S&P 500 index SPX edged less than a point lower to reach 2,596, while the Nasdaq Composite Index fell 0.2% to close at 6.971. For the week however, the Dow Jones Industrial Average and S&P 500 both rose more than 2 percent while the Nasdaq Composite jumped 3.45 percent. That was the third straight week of gains for the broad based indexes.
The market also seemed to calm itself despite the macro concerns that include a trade war, global economic slowdown, government shutdown, a pending Brexit vote and a volatile, somewhat unpredictable Fed. Friday was the fifth day without an S&P 500 move greater than 1 percent in either direction, the longest quiet streak since early October for the benchmark.
Analysts are generally expecting earnings in general to be up 14.7% on mixed results but they are more interested to hear what the forward looking rhetoric for 2019 will be. Expectations are for growth rates to be lower especially with Apple’s recen t earnings warning. We are also looking at a pretty stiff resistance level at 2600, so cautionary 2019 earnings news in combination with technical resistance at 2600 could provide some further headwinds.
This morning the markets are under a little pressure due to three primary factors. The first was when China posted the worst import and export figures since 2016. Exports fell 4.4% in December while imports slumped 7.6%, providing a grim domestic backdrop for China’s negotiations with the Trump administration on trade. The second was the mixed results from Citigroup bringing into question the health and strength of the financial sector as we enter into earnings season. The third was the news from utility company PG&E that it expects to file for a Chapter 11 bankruptcy reorganization in a California court on or about January 29, as it wrestles with the expected liabilities associated with wildfires that took place in 2017 and 2018. All three of these factors are creating a risk off atmosphere for investors in a market that has been up close to 3% year to date.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 7,294.58.
The projected lower bound is: 6,507.02.
The projected closing price is: 6,900.80.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black 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 87.4623. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 7 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 52.31. 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 12 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 79. This is not a topping or bottoming area. The last signal was a sell 0 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 8 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed down -65.561 at 6,905.915. Volume was 22% below average (neutral) and Bollinger Bands were 23% wider than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 6,804.46 7,002.89 7,449.52
Volatility: 33 36 25
Volume: 584,250,624 634,301,888 556,895,104
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 7.3% below its 200-period moving average and is in an upward 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 bullish on .IXIC and have had this outlook for the last 3 periods.
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