NASDAQ Composite (.IXIC) investors awaiting U.S.-China trade talks the end of this week at the G20 summit
Global equity markets traded mostly flat on Monday as investors awaited U.S.-China trade talks the end of this week at the G20 summit, and the dollar fell to three-month lows on bets the Federal Reserve may cut interest rates more than once this year.
European stocks stumbled on fears of an escalation in Iran tensions, which also kept gold prices near a six-year high. U.S. President Donald Trump targeted Iranian Supreme Leader Ayatollah Ali Khamenei and other Iranian senior officials with new sanctions on Monday.
Chinese state media said on Sunday that President Xi Jinping will attend the G20 summit in Osaka, Japan, in the first official confirmation of his attendance at a gathering where he is expected to meet with Trump.
On Wall Street, the S&P 500 closed slightly lower as healthcare companies lost ground. The technology-rich Nasdaq also fell while the Dow industrials edged higher.
Stocks are unlikely to push much higher without progress on U.S.-China trade or a Fed rate cut, said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.
“Until we get that G20 meeting and start to get some feedback from the (Trump) administration, it’s going to be tough to go higher,” he said.
MSCI’s gauge of equity performance around the globe gained 0.05%. In Europe, the FTSEurofirst 300 index of leading regional shares closed down 0.25% on weak German economic data and a profit warning from Mercedes-Benz maker Daimler .
German business morale fell in June to its lowest level since November 2014, an Ifo institute survey showed, adding weight to expectations that Europe’s largest economy contracted in the second quarter. Germany’s DAX index fell 0.53%.
On Wall Street, the Dow Jones Industrial Average rose 8.41 points, or 0.03%, to 26,727.54. The S&P 500 lost 5.11 points, or 0.17%, to 2,945.35, and the Nasdaq Composite dropped 26.01 points, or 0.32%, to 8,005.70.
The dollar softened against a basket of currencies on bets the Fed may lower rates more than once this year, while U.S.-Iranian tensions provided safe-haven support for the yen.
The dollar index fell 0.22% and the euro rose 0.25% to $1.1394. The Japanese yen rose 0.04% versus the greenback at 107.34 per dollar.
Interest rate futures implied traders have priced in a 100% chance the Fed will cut rates at its next policy meeting at the end of July, with a high probability for two additional rate cuts, according to CME Group’s FedWatch program.
U.S. Treasury yields fell, holding just above almost three-year lows. The benchmark 10-year U.S. Treasury note rose 13/32 in price to push yields down to 2.0211%.
The glum German data pushed down bond yields across the euro zone and reinforced expectations for an ECB rate cut.
In developing markets, the Turkish lira strengthened as much as 2% after Turkey’s main opposition won a re-run election in Istanbul for mayor on Sunday, a blow to President Tayyip Erdogan. The lira later pared gains.
Bitcoin pulled back from 15-month highs after jumping more than 10% over the weekend. Analysts said the gains came amid growing optimism over the adoption of cryptocurrencies after Facebook announced its Libra digital coin.
Brent crude, the international benchmark, fell on concerns about the possibility of weakening demand after large gains last week caused tensions between the United States and Iran.
Benchmark Brent crude fell 34 cents to settle at $64.86 a barrel, while U.S. crude futures rose 47 cents to settle at $57.90 a barrel.
Gold prices rose more than 1 percent to a near six-year peak as the dollar fell, with safe-haven bullion also boosted by Trump’s announcement of fresh sanctions on Iran. U.S. gold futures settled up 1.3% at $1,418.20 an ounce.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 8,248.75.
The projected lower bound is: 7,764.98.
The projected closing price is: 8,006.86.
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 24 white candles and 26 black candles for a net of 2 black candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with NASDAQ COMPOSITE). It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 76.7223. This is not an overbought or oversold reading. The last signal was a sell 0 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 61.58. 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 14 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 101.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.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 11 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed down -26.011 at 8,005.696. Volume was 7% below average (neutral) and Bollinger Bands were 66% wider 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: 7,912.40 7,863.23 7,512.25
Volatility: 11 20 26
Volume: 580,888,768 551,362,112 593,493,376
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 6.6% above 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 5 periods.
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