NASDAQ Composite (.IXIC) investors should tread lightly short-term

NASDAQ Composite (.IXIC) investors should tread lightly short-term

NASDAQ Composite (.IXIC) investors should tread lightly short-term

President Donald Trump once said trade wars are “good, and easy to win.” But the stock market and many fund/retirement portfolios are becoming casualties of a war, which investors are asking, “what is it good for?” Corporate CEOs are responding, “absolutely nothing.”

Investors were caught off guard Thursday evening after President Trump, seeking to stem the flow of migrants across the U.S. border, announced plans to impose tariffs on imports from Mexico. The President says Mexico could face a 5% tariff on all goods coming into the country, unless Mexico “STOP” the flow of illegal migrants into the U.S. He said the tariffs will increase to 10% on July 1 if there’s no improvement, and will rise by another 5% every month, up to 25% by Oct. 1 if the crisis persists.

“Tariffs will permanently remain at the 25% level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory,” Trump said.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 7,680.16.

The projected lower bound is: 7,215.10.

The projected closing price is: 7,447.63.

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.

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 5 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 15.5959. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 22 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 31.38. 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 22 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 -156.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 7 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 21 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed down -114.568 at 7,453.148. Volume was 4% above average (neutral) and Bollinger Bands were 50% wider than normal.

Open High Low Close Volume___
7,470.9487,506.8587,448.2277,453.148 590,431,360

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

Moving Averages: 10-period 50-period 200-period
Close: 7,649.60 7,869.04 7,524.06
Volatility: 16 19 26
Volume: 552,759,808 540,291,840 584,828,224

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 0.9% 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 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 15 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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