NASDAQ Composite (.IXIC) rallied for a second day as upbeat quarterly earnings

NASDAQ Composite (.IXIC) rallied for a second day as upbeat quarterly earnings

NASDAQ Composite (.IXIC) rallied for a second day as upbeat quarterly earnings

The stock market rallied for a second day as upbeat quarterly earnings from Facebook ( FB ) and General Motors ( GM ) fueled outsized gains in Wall Street’s major averages with the Nasdaq Composite again taking the lead. Led by gains in IT services and communication stocks, the tech-laden index lunged to its highest level in five days.

But the impressive back-to-back gains couldn’t erase what was an ugly month for Wall Street with $8 trillion dollars in wealth wiped out over the last 31 days. The Nasdaq ended October 9% lower, its worst month in a decade. The Dow Jones Industrial Average was down for the first time in four months, shedding 5% from September, while the S&P 500 ended a six-month winning streak with a 7% loss, only the third time this year the S&P ended the month lower.

Overall, the bias in prices is: Downwards.

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

By the way, prices are vulnerable to a correction towards 7,654.13.

The projected upper bound is: 7,604.53.

The projected lower bound is: 6,985.14.

The projected closing price is: 7,294.83.

Candlesticks

A white body occurred (because prices closed higher 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 22 white candles and 28 black candles for a net of 6 black candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 4 rising windows in the last 50 candles–this makes the current rising window even more bullish.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 49.6829. This is not an overbought or oversold reading. The last signal was a buy 4 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 42.53. 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 4 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 -25. This is not a topping or bottoming area. The last signal was a buy 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 20 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed up 144.249 at 7,305.899. Volume was 42% above average (neutral) and Bollinger Bands were 96% wider than normal.

Open High Low Close Volume___
7,276.6227,368.4947,270.6317,305.899 761,544,896

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

Moving Averages: 10-period 50-period 200-period
Close: 7,295.21 7,777.50 7,518.65
Volatility: 41 26 23
Volume: 669,084,160 591,115,904 539,503,552

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 up today (bullish) 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 2.8% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 19 periods.

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