NASDAQ Composite (.IXIC) in store for their sharpest May losses in seven years

NASDAQ Composite (.IXIC) in store for their sharpest May losses in seven years

NASDAQ Composite (.IXIC) in store for their sharpest May losses in seven years

The three main U.S. stock benchmarks are in store for their sharpest May losses in seven years as Sino-American trade tensions buffet equity values on Thursday.

The indexes are poised for an ugly monthly skid, with the Dow Jones Industrial Average DJIA, -1.11% the Nasdaq Composite Index COMP, -1.58% and the S&P 500 index SPX, -1.19% set for a decline of at least 4% so far in May.

If the losses hold over the next several trading sessions, it would represent the first May decline for any of the benchmarks since 2012, according to Dow Jones Market Data.

Check out: Dow tumbles 300 points as investors brace for a protracted U.S.-China trade standoff

The stumble for stocks across the globe comes as investors are placing bets that a U.S.-China trade pact between the world’s largest economies may take far longer than originally anticipated — a view that is causing a more deliberate reassessment of prospects for corporate earnings and global economic growth.

Bloomberg reported on Thursday that strategists at Goldman Sachs, Nomura and JPMorgan Chase & Co. are among those who have shifted a Sino-American trade war to baseline expectation from just a possibility.

On top of that, fears that Britain might tumble from out of the European Union without a new trade pact in hand, also have grown, bringing with it the possibility of unsettling market participants, who have mostly prepared for an orderly Brexit.

Back in May of 2012, stocks booked their worst monthly loss in two years amid escalating concerns surrounding the eurozone debt crisis, with countries like Spain and Greece at the epicenter of raising fears of a debt contagion that could wreck Europe’s financial markets, only four years after the financial crisis buckled global economies.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 7,855.70.

The projected lower bound is: 7,400.27.

The projected closing price is: 7,627.98.

Candlesticks

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 27 white candles and 23 black candles for a net of 4 white 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 3 falling windows in the last 50 candles–this makes the current falling window even more bearish.

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 25.6385. This is not an overbought or oversold reading. The last signal was a sell 17 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 37.46. 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 sell 17 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 -129.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 2 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 sell 16 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed down -122.559 at 7,628.284. Volume was 6% above average (neutral) and Bollinger Bands were 35% wider than normal.

Open High Low Close Volume___
7,660.7177,665.1487,585.3167,628.284 597,195,456

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 7,770.22 7,882.53 7,531.61
Volatility: 28 19 26
Volume: 549,286,272 560,229,184 582,463,296

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 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 1.3% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume out of .IXIC (mildly bearish). Our trend forecasting oscillators are currently bearish on .IXIC and have had this outlook for the last 10 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.

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