NASDAQ Composite (.IXIC) – Solid earnings send stock indexes higher on Wall Street
Stocks closed broadly higher on Wall Street Wednesday, driving the S&P 500 and Nasdaq indexes to more record highs.
Technology stocks powered much of the rally as investors focused on the latest batch of mostly solid company earnings reports. The latest gains came as worries about the economic impact of the virus outbreak that originated in China continued to subside.
Health officials raised hopes that the spread of the virus is peaking after new cases dropped for a second straight day. Worries about the economic impact of the outbreak fueled a wave of selling that erased the market’s gains in January, but traders have since largely set aside their jitters.
The S&P 500 index is up 4.8% so far this month, on pace for its biggest monthly gain since June.
The S&P 500 index rose 21.70 points, or 0.6%, to 3,379.45. The Nasdaq climbed 87.02 points, or 0.9%, to 9,725.96. Both indexes have set all-time closing highs every day this week.
The Dow Jones Industrial Average gained 275.08 points, or 0.9%, to 29,551.42. The Russell 2000 index of smaller company stocks picked up 11.86 points, or 0.7%, to 1,689.38.
Major indexes in Europe and Asia finished higher.
Bond prices fell. The yield on the 10-year Treasury rose to 1.63% from 1.59% late Tuesday.
Stronger-than-expected company earnings reports and positive U.S. economic data have helped keep investors in a buying mood. Traders are also banking that central banks and governments around the world will support markets with rate cuts and stimulus to stem any potential economic fallout from the virus outbreak.
Investors got some encouraging news Wednesday when health officials reported that the number of new cases of the coronavirus in China declined for a second straight day. The outbreak has infected over 45,000 people worldwide and killed more than 1,100.
Meanwhile, Chinese President Xi Jinping promised tax cuts and other aid to industry as the ruling Communist Party tries to limit the mounting damage to the economy.
Wall Street appeared to largely ignore the outcome of Tuesday’s Democratic presidential primary in New Hampshire, which Bernie Sanders won, edging out moderate rival Pete Buttigieg.
Despite Sanders’ surge, it’s still not clear which of the Democratic candidates will win the nomination, Martin noted.
“The feeling has been that Sanders, if he did become the candidate, has a platform that would not appeal to the country as a whole, so that if he was the candidate, Trump would easily beat him,” he said.
Sanders has energized young voters and liberals with his calls for a Medicare for All health care system and free college tuition, but moderates portray such policies as unrealistic and costly.
“As far as a more moderate candidate, those would be more competitive and that would be potentially a negative if you had a credible candidate that might make a national election between the Democrats and the Republicans competitive,” Martin said.
Benchmark crude oil rose $1.23 to settle at $51.17 a barrel. Brent crude oil, the international standard, gained $1.78 to close at $55.79 a barrel. Wholesale gasoline rose 7 cents to $1.58 per gallon. Heating oil climbed 5 cents to $1.68 per gallon. Natural gas rose 5 cents to $1.84 per 1,000 cubic feet.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 9,954.36.
The projected lower bound is: 9,539.98.
The projected closing price is: 9,747.17.
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.
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 89.4765. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 14 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 71.81. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 13 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 124.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 14 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 4 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed up 87.020 at 9,725.962. Volume was 6% above average (neutral) and Bollinger Bands were 31% 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: 9,478.59 9,091.74 8,316.95
Volatility: 19 14 19
Volume: 596,301,888 596,610,944 559,462,464
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 16.9% 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 80 periods. Our momentum oscillator is currently indicating that .IXIC is currently in an overbought condition.
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