NASDAQ Composite (.IXIC) Positive for the Week Despite Airstrike Concerns
The S&P’s five-week winning streak came to an end on Friday as a U.S. airstrike in the Middle East forced this rally to take a break.
The index declined 0.71% today to finish at 3234.85, which is only a little more than 5 points below last Friday. However, that was enough to end an impressive run that stretched all the way back to Thanksgiving.
The NASDAQ managed to remain barely positive for the week despite a decline of 0.79% (or about 71 points) to 9020.77. The Dow slipped 0.81% (or nearly 234 points) to 28,634.88, which was down about 10 points from last Friday.
The indices came into the session solidly higher for the week after starting 2020 yesterday with a nice rally, which included gains of more than 1% for the Dow and NASDAQ.
But last night, we received news that the U.S. killed Iran’s top military leader in an airstrike.
With tensions already on the rise between the U.S. and Iran after our embassy was attacked in Baghdad, this action had the market worried about retaliation and a continued deterioration of the two countries’ already strained relationship.
Crude oil surged more than 3% on the day.
We also received another disappointing read on manufacturing, as the ISM index came in at 47.2 for December. That’s below expectations of around 49 and marked the fifth straight month of contraction (sub 50 reading).
So between the Middle East and manufacturing here at home, the market finally had some reason to pullback.
However, you’ve probably noticed that this wasn’t much of a decline. In fact, the major indices gained more yesterday than they lost today.
This certainly didn’t feel like the air coming out of rally. Instead, it seemed like the bulls saw a reason to take a break, which means this slump could be a buying opportunity moving forward.
So let’s keep watch for any new developments or escalation over the weekend, and then get ready to start the first full week of 2020 on Monday.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 8,685.29.
The projected upper bound is: 9,179.35.
The projected lower bound is: 8,898.85.
The projected closing price is: 9,039.10.
A white body occurred (because prices closed higher 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 29 white candles and 21 black candles for a net of 8 white 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 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 70.0171. This is not an overbought or oversold reading. The last signal was a sell 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 68.27. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 0 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 87. This is not a topping or bottoming area. The last signal was a sell 0 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 13 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed down -71.420 at 9,020.770. Volume was 14% above average (neutral) and Bollinger Bands were 38% 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: 8,977.13 8,611.26 8,124.58
Volatility: 12 10 18
Volume: 613,830,400 554,427,392 548,670,464
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 11.0% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into .IXIC (mildly bullish). Our trend forecasting oscillators are currently bullish on .IXIC and have had this outlook for the last 53 periods.
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