NASDAQ Composite (.IXIC) Stocks Mixed on Weak Retail Sales

NASDAQ Composite (.IXIC) Stocks Mixed on Weak Retail Sales

NASDAQ Composite (.IXIC) Stocks Mixed on Weak Retail Sales

Markets opened mixed to flat today following yesterday’s broad based rally. Tuesday, stocks closed near the highs of the day on lower than average daily trading volume. Earnings strength along with a positive tone to the macro-economic environment helped sustain yesterday’s rally. Trading volumes continue to be a concern as below average trading volumes seem to be the norm. The old trader’s adage of “volume validates the move” comes to mind here. As long as trading volumes on the consolidated tape continue to trend below average, market direction will lack conviction.

Today, a mixed bag of economic data, trade talks concerns and a lack of a formal Brexit deal are all points of concerns. Corporate earnings are also contributing to a lack of direction for equities this morning.

Currently six of 11 major S&P 500 sectors are trading higher. Materials are up over ¾ of a percent while Tech is down about the same. Crude oil is higher reversing a 2 day slide. Gold trades slightly higher as a hedge to equities. The dollar trades lower while the yield on the 10-yr stands at 1.76%.

September retail sales in the US declined for the first time in seven months. The top-line number showed a decline of -0.3% which missed economist expectations of +0.3% growth month-over-month. Core retail sales (excluding autos and fuel) were flat and also missed expectations of a +0.3% increase.  The retail sales control group was also flat compared to August. What is interesting is that all of August’s numbers, which were positive, were revised higher across the board. So the misses, though disappointing, come on the back of revised higher comps. All in all, the print does not seem as bad as the headline numbers, but still shows that the consumer was a bit more cautious with their pocketbook in September.

Consumer spend has been the one bright spots for the economy. Today’s retail sales data showed a slowdown in September spend, however August’s upward revision offset some of the initial print’s concerns. Consumer spend accounts for a large chunk of US GDP. Today’s release could have implications for the Fed. To that effect the Fed Funds Futures now shows an 85% chance of a rate cut at their October meeting. That number stood at 70% last Friday. 

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 8,407.59.

The projected lower bound is: 7,852.42.

The projected closing price is: 8,130.00.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.

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.

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 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 85.1230. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 15 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 56.28. 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 94 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 137.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 5 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 buy 3 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed down -24.522 at 8,124.184. Volume was 15% below average (neutral) and Bollinger Bands were 18% narrower than normal.

Open     High      Low     Close     Volume___
8,119.8118,146.1508,103.3758,124.184 470,296,064
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 7,986.78 7,993.63 7,779.74
Volatility: 18 22 20
Volume: 460,892,800 534,674,784 559,723,968

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 4.4% above its 200-period moving average and is in an downward trend. Volatility is Our volume indicators reflect volume flowing into and out of .IXIC at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .IXIC and have had this outlook for the last 10 periods.

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