NASDAQ Composite (.IXIC) post worst day in a month

NASDAQ Composite (.IXIC) post worst day in a month

NASDAQ Composite (.IXIC) post worst day in a month

The Dow and the broader stock market ended in the red Thursday, on one of the biggest days of the earnings season.

Both the Dow and the Nasdaq Composite recorded their worst one-day percentage drops in a month.

The Dow (INDU) closed 0.5%, or 129 points, lower. The S&P 500 (SPX) also finished down 0.5%, and the Nasdaq Composite (COMP) closed down 1%, just one day after both indexes closed at new record highs on Wednesday.

Earnings season is in full swing and it’s one of its busiest days yet. Missed expectations led stocks to selloff and drag the market at large down with them.

The biggest loser in the S&P and the second-biggest in the Nasdaq was Invisalign maker Align Technology (ALGN), which closed down 27% in the after issuing a profit warning. In the Dow, the worst stock was Dow Inc (DOW), which dropped 3.8%.

Before the bell, American Airlines (AAL) reported second quarter results, forecasting a $400 million hit for full-year earnings from Boeing’s (BA) 737 Max crisis.

3M (MMM) and Budweiser-parent Anheuser-Busch InBev (BUD) also reported before the opening bell rings. Both beat earnings expectations.
Internet giants Google (GOOG) and Amazon (AMZN), as well as chip maker Intel (INTC) and Starbucks (SBUX), are posting their earnings after the market close.

Growth fears

Elsewhere, the European Central Bank delivered it’s monetary policy update. The central bank left interest rates unchanged and said rates would remain at their current levels or lower “at least through the first half of 2020.” In the subsequent press conference, ECB President Mario Draghi said the outlook for the eurozone economy is getting “worse and worse.”
Investors now expect the ECB to ease its policy in September. The central bank said in a statement it would “examine options” such as new asset purchases.

Looser monetary policy generally supports stock prices, because it allows companies to borrow at cheaper rates. Following Draghi’s comments, however, European stocks ended in the red, with the pan-European Stoxx 600 (SXXP) closed down 0.6%.

The ECB update comes less than a week before the Federal Reserve meeting at which investors expect interest rates to get cut by at least a quarter percentage point.

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 7,954.25.

The projected upper bound is: 8,456.77.

The projected lower bound is: 8,040.47.

The projected closing price is: 8,248.62.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 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 82.5207. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 6 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 59.26. 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 36 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 91. This is not a topping or bottoming area. The last signal was a sell 0 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 5 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed down -82.959 at 8,238.541. Volume was 3% below average (neutral) and Bollinger Bands were 35% narrower than normal.

Open     High      Low     Close     Volume___
8,294.6848,295.9498,233.3998,238.541 535,586,976
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 8,227.96 7,923.52 7,531.71
Volatility: 12 17 26
Volume: 495,635,296 559,436,288 588,436,864

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 9.4% 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 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 27 periods.

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