NASDAQ Composite (.IXIC) may give back some ground in early trading

NASDAQ Composite (.IXIC) may give back some ground in early trading

NASDAQ Composite (.IXIC) may give back some ground in early trading

After ending the previous session mostly higher, stocks may give back some ground in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 42 points.

Profit taking may contribute to initial weakness on Wall Street, as traders cash in on recent gains after the S&P 500 reached a new record closing high on Monday.

Trepidation ahead of the Federal Reserve’s monetary policy announcement on Wednesday may also inspire some traders to look for safer havens.The Fed is widely expected to cut interest rates by another quarter point, although traders may wait to see if the central bank follows through and provides any clues about future rate cuts.

A negative reaction to the latest batch of earnings news may also weigh on the markets, with Google parent Alphabet (GOOGL) moving notably lower in pre-market trading after reporting its third quarter results.

After the close of trading on Monday, Alphabet reported third quarter earnings that missed analyst estimates, hurt largely by higher operating costs.

On the other hand, General Motors (GM) may see initial strength after reporting better than expected third quarter earnings, although the auto giant also lowered its full-year earnings guidance.

Shortly after the start of trading, the Conference Board is due to release its report on consumer confidence in the month of October. The consumer confidence index is expected to rebound to 128.5 in October after slumping to 125.1 in September.

The major averages ended the session off their best levels of the day but still firmly in positive territory. While the S&P 500 climbed 16.87 points or 0.6 percent to 3,039.42, the Nasdaq jumped 82.87 points or 1 percent to 8,325.99 and the Dow rose 132.66 points or 0.5 percent to 27,090.72.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 8,041.12.

The projected upper bound is: 8,515.47.

The projected lower bound is: 8,049.19.

The projected closing price is: 8,282.33.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.

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 89.0470. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 7 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 60.73. 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 103 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 154.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 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 buy 12 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed down -49.136 at 8,276.851. Volume was 13% below average (neutral) and Bollinger Bands were 15% wider than normal.

Open     High      Low     Close     Volume___
8,313.3468,319.2918,275.1368,276.851 468,375,328
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 8,178.94 8,043.33 7,841.02
Volatility: 13 19 19
Volume: 482,389,664 517,637,536 555,189,888

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 5.6% above its 200-period moving average and is in an upward trend. Volatility is low 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 8 periods.

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