NASDAQ Composite (.IXIC) sinks 1.5% as tech-related stocks get clobbered
Information technology shares and those related to telecoms suffered sharp losses Tuesday, as commentary from the Federal Reserve moderated hopes for a substantial reduction of benchmark borrowing costs. Rate-cut hopes have thus far underpinned equity market’s record rally.
The Dow Jones Industrial Average DJIA, -0.67% fell 0.7%, to 26,548, those for the S&P 500 index SPX, -0.95% finished 1% lower at 2,917, with the info tech sector XLK, -1.84% losing 1.8% and the communication services sector XLC, -1.86% shedding 1.6% to lead the 11 S&P 500 sectors lower Tuesday.
Shares of those companies, including Facebook Inc. FB, -1.95% have been among the best performers as the broader market carved out new records, with the S&P 500 setting its first closing record since April 30 on Thursday.
As tech-related stocks got clobbered, the technology-heavy Nasdaq Composite Index COMP, -1.51% endured the brunt of the day’s selling, down 1.5% at 7,885, representing the worst day for the index sine June 3.
Speaking at the Council on Foreign Relations in New York at 1 p.m. Eastern Time, Fed Chairman Jerome Powell said the rate-setting Federal Open Market Committee was “grappling with is whether these uncertainties will continue to weigh on the outlook and thus call for additional policy accommodation,” in prepared remarks.
Before that comment, St. Louis Fed President James Bullard, a dovish FOMC member who had advocated for a rate cut, said he didn’t endorse an aggressive cut to benchmark rates, which stand at a range of 2.25%-2.50%.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 8,129.46.
The projected lower bound is: 7,636.00.
The projected closing price is: 7,882.73.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.
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 48.0525. This is not an overbought or oversold reading. The last signal was a sell 1 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 53.18. 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 15 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 33. 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 12 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed down -120.979 at 7,884.717. Volume was 4% below average (neutral) and Bollinger Bands were 64% 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: 7,918.62 7,861.24 7,512.06
Volatility: 15 20 26
Volume: 582,209,344 552,911,488 593,536,576
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 5.0% above its 200-period moving average and is in an upward trend. Volatility is high 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 6 periods.
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