NASDAQ Composite (.IXIC) Stocks slide on Wall Street, extending steep drops this week

NASDAQ Composite (.IXIC) Stocks slide on Wall Street, extending steep drops this week

NASDAQ Composite (.IXIC) Stocks slide on Wall Street, extending steep drops this week

Stocks rose solidly in early trading on Wednesday, however, the stocks gave up their early gains and ended lower, extending their losses for the week. 

Worries about economic fallout from the virus outbreak that originated in China has fueled a sharp sell-off that wiped out the market’s gains for the year.

Energy stocks sank along with the price of oil. Cruise operators fell again, deeping a monthlong rout.

The bond market continued to flash warning signs as long-term yields fell further below short-term ones.

The S&P 500 fell 11 points, or 0.4%, to 3,116. The Dow Jones Industrial Average fell 123 points, or 0.5%, to 26,957. The Nasdaq edged up 15 points, or 0.2%, to 8,980.

The Dow lost 1,911 points combined Monday and Tuesday — the worst two-day slide in history. The S&P 500 has lost 7.6% in the last four days since hitting a record high last Wednesday. That’s the benchmark index’s worst such stretch since the end of 2018, resulting in $2.14 trillion in losses, according to S&P Global. Tuesday also marked the first back-to-back 3% losses for the index since the summer of 2015.

Global shares fell Wednesday. Japan’s benchmark Nikkei 225 declined 0.8%, while Australia’s S&P/ASX 200 dipped 2.3% South Korea’s Kospi lost 1%. Hong Kong’s Hang Seng declined 0.8%. The Shanghai Composite fell 0.8%.

Shares fell in Taiwan and most of Southeast Asia but rose in Malaysia following recent losses due to political turmoil.

The latest wave of selling came as more companies, including United Airlines and Mastercard, warned the outbreak of a new coronavirus will hurt their finances, and more cases were reported in Europe and the Middle East, far from the epicenter in China.

Meanwhile, U.S. health officials called on Americans to be prepared for the disease to spread in the United States, where there are currently just a few dozen cases.

Travel-related stocks took another drubbing, bringing the two-day loss for American Airlines to 16.9%. The large publicly traded cruise operators have also suffered double-digit losses.

The worst-case scenario for investors — where the virus spreads around the world and cripples supply chains and the global economy — hasn’t changed in the last few weeks. But the probability of it happening has risen, said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.

“It’s the combination of South Korea, Japan, Italy and even Iran” reporting virus cases, Ma said. “That really woke up the market.”

The viral outbreak that originated in China has now infected more than 80,000 people globally, with more cases being reported in Europe and the Middle East. The majority of cases and deaths remain centered in China, but the rapid spread to other parts of the world has spooked markets and raised fears that it will hurt the global economy.

South Korean virus cases jumped again Wednesday and the U.S. military confirmed its first case among soldiers based in the Asian country, with his case and many others connected to a southeastern city with an illness cluster.

South Korea’s Centers for Disease Control and Prevention said 134 of the 169 new cases were in Daegu, where the government has been mobilizing public health tools to contain the spread of the outbreak.

The U.S. military said the 23-year-old soldier was in self-quarantine at his off-base residence.

On Tuesday, U.S. health officials warned that it’s inevitable the virus will spread more widely in America.

“It’s not so much a question of if this will happen anymore, but rather more a question of exactly when this will happen – and how many people in this country will have severe illness,” Dr. Nancy Messonnier of the Centers for Disease Control and Prevention said in a call with reporters.

Technical Indicators

Overall, the bias in prices is: Downwards.

The projected upper bound is: 9,275.67.

The projected lower bound is: 8,696.42.

The projected closing price is: 8,986.04.

Candlesticks

A black body occurred (because prices closed lower 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 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 5.4145. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 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 33.41. 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 sell 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 -185.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 4 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 3 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed up 15.162 at 8,980.775. Volume was 50% above average (neutral) and Bollinger Bands were 97% wider than normal.

Open     High      Low     Close     Volume___
9,011.5489,148.3228,927.7958,980.775 870,349,184
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 9,521.42 9,251.67 8,383.37
Volatility: 29 20 20
Volume: 669,122,752 619,983,040 564,335,168

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 7.1% above 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 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 1 periods.

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