NASDAQ Composite (.IXIC) hopes of sharp rate cut fade

NASDAQ Composite (.IXIC) hopes of sharp rate cut fade

NASDAQ Composite (.IXIC) hopes of sharp rate cut fade

U.S. stocks fell on Monday,pressured by a drop in Apple Inc following a broker downgrade,and as investors toned down expectations of an aggressiveinterest rate cut by the Federal Reserve later this month.

Apple IncAAPL.O fell 2.1% and was the biggest drag on allthree main Wall Street indexes. Rosenblatt Securities downgradedthe iPhone maker’s shares to “sell” from “neutral,” and said itexpected the company to face “fundamental deterioration” in thenext six to 12 months.

The technology .SPLRCT index was down 0.8%, while thehealthcare index .SPXHC dropped 0.9%, weighed down byPresident Donald Trump’s recent statement about an upcomingexecutive order that would lower prescription drug prices.

Surprisingly strong U.S. jobs data on Friday has forcedtraders to temper hopes of a sharp rate cut at the centralbank’s July 30-31 policy meeting, even as a reduction is stillexpected.

“That’s kind of concerning the market if just from thestandpoint of the market’s done well and now it’s a matter of,were Friday’s numbers too positive, and might we not get thecuts investors were hoping for,” said Alan Lancz, president ofAlan B. Lancz & Associates Inc, an investment advisory firm,based in Toledo, Ohio.

“That’s put a cloud over the market as well.”

Investors might get an opportunity to gauge near-termmonetary policy thinking during Fed Chairman Jerome Powell’ssemi-annual testimony to the U.S. Congress on July 10-11. Alsoahead are the central bank’s June meeting minutes, scheduled forrelease on Wednesday.

The Dow Jones Industrial Average .DJI fell 140.12 points,or 0.52%, to 26,782, the S&P 500 .SPX lost 16.9 points, or0.57%, to 2,973.51 and the Nasdaq Composite .IXIC dropped68.69 points, or 0.84%, to 8,093.10.

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 7,846.85.

The projected upper bound is: 8,347.70.

The projected lower bound is: 7,848.25.

The projected closing price is: 8,097.98.

Candlesticks

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 26 white candles and 24 black candles for a net of 2 white candles.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 84.9853. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 9 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 60.95. 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 23 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 67. This is not a topping or bottoming area. The last signal was a sell 0 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 20 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed down -63.409 at 8,098.382. Volume was 11% below average (neutral) and Bollinger Bands were 4% narrower than normal.

Open High Low Close Volume___
8,112.9098,112.9098,078.3928,098.382 511,733,568

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period     50-period     200-period
Close: 8,040.50 7,864.99 7,516.48
Volatility: 14 20 26
Volume: 631,459,072 576,167,872 599,186,816

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.

Summary

NASDAQ COMPOSITE is currently 7.7% 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 14 periods.

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