NASDAQ Composite (.IXIC) Investors’ focus on speech by Federal Reserve Chair Jerome Powell

NASDAQ Composite (.IXIC) Investors’ focus on speech by Federal Reserve Chair Jerome Powell

NASDAQ Composite (.IXIC) Investors’ focus on speech by Federal Reserve Chair Jerome Powell

An index of stock markets worldwide crept lower on Thursday on uncertainty over the outlook for U.S. interest rate cuts and weak U.S. manufacturing data that raised concerns about the health of the world’s largest economy.

U.S. manufacturing industries in July recorded their first month of contraction in almost a decade amid concerns about whether the U.S.-China trade conflict would tip the economy into a recession, a private survey showed.

Investors’ focus, however, remained firmly on Friday’s speech by Federal Reserve Chair Jerome Powell at a Jackson Hole, Wyoming, event, which could offer clarity on the direction of U.S. monetary policy.

The Fed has come under increasing pressure to cut borrowing costs more, including a call by President Donald Trump on Wednesday for the central bank to reduce its benchmark rate.

The MSCI world equity index , which tracks shares in 47 countries, was down 0.25%.

On Wall Street, stocks finished a choppy session nearly unchanged. While strong results from retailers bolstered confidence in consumer demand and lifted shares, the manufacturing data and uncertainty about the interest rate outlook kept investors in check.

The Dow Jones Industrial Average was the strongest of the three U.S. major stock indexes, helped by a 4.24% jump in Boeing’s shares after a Reuters report that the company has told suppliers it will resume production of its best-selling 737 jets at a rate of 52 aircraft per month in February 2020.

The Dow rose 49.51 points, or 0.19%, to finish at 26,252.24, the S&P 500 lost 1.48 points, or 0.05%, to end at 2,922.95 and the Nasdaq Composite dropped 28.82 points, or 0.36%, to close at 7,991.39.

While the Fed’s latest minutes showed U.S. policymakers are reluctant to begin a big rate-cutting cycle in the coming months, market participants still expect it to signal a stimulus measure, or an affirmation that the U.S. central bank is on a steady path to ease interest rates, a scenario viewed as negative for the dollar.

Kansas City Fed President Esther George and Philadelphia Fed President Patrick Harker said on Thursday the U.S. central bank currently does not need to deliver more stimulus to the economy after it cut rates for the first time in more than a decade last month.

Asian currencies suffered after the Chinese yuan fell to an 11-year low against the dollar, indicating trade tension between the world’s two biggest economies remained a major issue. nB9N22601Z]

U.S. Treasury yields climbed as comments from Fed officials dampened hopes of future interest rate cuts.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 8,257.60.

The projected lower bound is: 7,733.12.

The projected closing price is: 7,995.36.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 25 white candles and 25 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. It then signifies that the momentum may be shifting from the bulls to the bears.

If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with NASDAQ COMPOSITE), 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 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 82.1208. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 11 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 49.69. 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 56 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 70. This is not a topping or bottoming area. The last signal was a buy 10 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 1 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed down -28.820 at 7,991.388. Volume was 18% below average (neutral) and Bollinger Bands were 24% wider than normal.

Open     High      Low     Close     Volume___
8,038.7898,048.5817,937.1257,991.388 456,698,176
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 7,923.84 8,052.31 7,590.23
Volatility: 28 21 25
Volume: 526,831,296 568,004,544 580,249,088

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 5.3% above its 200-period moving average and is in an downward 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 bearish on .IXIC and have had this outlook for the last 15 periods.

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