NASDAQ Composite (.IXIC) investors await Trump’s State of the Union speech

NASDAQ Composite (.IXIC) investors await Trump’s State of the Union speech

NASDAQ Composite (.IXIC) investors await Trump’s State of the Union speech

Stocks closed higher Tuesday, with the S&P 500 extending its winning streak to a fifth session, as investors continued to sort through corporate earnings while awaiting President Donald Trump’s State of the Union address in the evening.

How did major benchmarks fare?

The Dow Jones Industrial Average DJIA, +0.68% rose 172.15 points, or 0.7%, to 25,411.52, while the S&P 500 SPX, +0.47% climbed 12.83 points, or 0.5%, to 2,737.70. The Nasdaq Composite Index COMP, +0.74%  gained 54.55 points, or 0.7%, to 7,402.08, inching toward 7,431.50, which would officially mark its exit from a bear market.

What drove the market?

The market’s mood remained buoyant, with investors tying strength to earnings that were perceived as upbeat. Tech shares were instrumental in paving the way higher, although Google parent Alphabet Inc. came under temporary selling pressure after its quarterly results showed costs rising faster than expected.

Trump is set to deliver his State of the Union address at 9 p.m. Eastern time Tuesday. Analysts said investors could prove more sensitive than usual to headlines surrounding the speech, given market jitters over U.S.-China trade talks and the prospects of another government shutdown if the White House and congressional Democrats are unable to agree to a deal on funding for a southern border wall before the current stopgap funding measure runs out later this month.

Federal Reserve Chairman Jerome Powell dined Monday night with Trump and Treasury Secretary Steven Mnuchin. However, they didn’t discuss expectations for monetary policy, “except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook,” the central bank said in a statement.

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 7,108.67.

The projected upper bound is: 7,776.25.

The projected lower bound is: 7,047.64.

The projected closing price is: 7,411.95.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 6 rising windows in the last 50 candles–this makes the current rising window even more bullish.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 95.2087. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 10 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 65.92. 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 27 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 170.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 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 23 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed up 54.548 at 7,402.084. Volume was 12% below average (neutral) and Bollinger Bands were 28% narrower than normal.

Open High Low Close Volume___
7,356.3407,408.6857,355.3627,402.084 551,118,528

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

Moving Averages: 10-period 50-period 200-period
Close: 7,185.64 6,960.58 7,454.20
Volatility: 19 34 25
Volume: 587,162,496 615,613,952 562,799,680

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 up today (bullish) 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 0.7% below 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 moderate flows of volume into .IXIC (mildly bullish). Our trend forecasting oscillators are currently bullish on .IXIC and have had this outlook for the last 18 periods.

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