NASDAQ Composite (.IXIC) Investors Need Trade Talk Progress to Sustain Rally

NASDAQ Composite (.IXIC) Investors Need Trade Talk Progress to Sustain Rally

NASDAQ Composite (.IXIC) Investors Need Trade Talk Progress to Sustain Rally

The major stock indexes in Asia are trading higher early Thursday, following the lead set by Wall Street on Wednesday. With Fed Chair Jerome Powell’s speech out of the way, investor focus will shift to the crucial meeting between President Donald Trump and Chinese leader Xi Jinping. Investors are hoping the sudden euphoria in the stock market fueled by Powell’s dovish message will continue if the U.S. and China reach a deal that will ease trade tensions between the two economic powerhouses.

At 0139 GMT, Japan’s NIKKEI 225 Index is trading 22357.16, up 180.14 or +0.81%. South Korea’s KOSPI is at 2125.73, up 17.51 or +0.83%. In Australia, the ASX 200 is at 5761.20, up 36.10 or +0.63%.

While market sentiment is a little more positive after Powell’s speech, trade uncertainty may be limiting gains. Investors will want to see progress this week-end at the Trump-Xi meeting, especially since President Trump is weighing additional tariffs on China if the talks fail to yield any fruit.

According to top White House economic advisor Larry Kudlow, the Trump administration has restarted talks with the Chinese government “at all levels” ahead of the meeting between both presidents at the G-20 summit in Argentina.

The key areas that Trump is set to discuss include alleged Chinese theft of intellectual property, ownership of American companies in China and tariffs and non-tariff barriers.

U.S. Stock Markets

Stock market bulls received an early gift on Wednesday from Federal Reserve Chairman Jerome Powell after the central bank chief said interest rates are close to neutral. This was a marked change in tone from comments Powell made in early October. Short-term Treasury yields fell on the news and investors celebrated by driving up the blue chip Dow Jones Industrial Average more than 600 points. This was its biggest one-day gain since March 26. It was also the Dow’s second-best day of the year.

The benchmark S&P 500 Index surged more than 2-percent as investors interpreted Powell’s comments to mean the Fed would pull-back on its plans to raise rates at least three more times in 2019. The NASDAQ Composite jumped 2.95 percent and posted its best day since October 25.

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 7,488.18.

The projected upper bound is: 7,645.01.

The projected lower bound is: 6,911.59.

The projected closing price is: 7,278.30.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black candles.

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 84.0746. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 3 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 51.21. 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 29. This is not a topping or bottoming area. 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 buy 0 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed up 208.892 at 7,291.592. Volume was 6% above average (neutral) and Bollinger Bands were 44% wider than normal.

Open High Low Close Volume___
7,135.0817,292.7117,090.9787,291.592 600,771,520

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

Moving Averages: 10-period 50-period 200-period
Close: 7,094.80 7,490.43 7,517.81
Volatility: 33 32 23
Volume: 566,066,368 628,626,368 541,608,896

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 3.0% below 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 38 periods.

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