NASDAQ Composite (.IXIC) strong economic data

NASDAQ Composite (.IXIC) strong economic data

NASDAQ Composite (.IXIC) strong economic data

U.S. stock indexes rose 1 percent on Thursday and were on pace to extend a two-day winning streak,lifted by better-than-expected earnings from Cisco and Walmart,and robust economic data that underscored the strength of the domestic economy.

Cisco Systems Inc CSCO.O rose 6.1%, the most among the S&P and the Dow indexes, after the network gear maker gave an upbeat sales forecast and said minimal sales exposure to China have helped cushion the impact from trade dispute.

Walmart Inc WMT.N rose 3.3% after it reported its best first-quarter same-store sales growth in nine years. The big box retailer also said prices for shoppers will rise due to higher tariffs on Chinese imports.

“Earnings is one positive, but the buying is across the bar,every sector and every index is up,” said Michael O’Rourke,chief market strategist at Jones Trading in Greenwich,Connecticut.

Strong data out of the United States soothed some fears ofan economic slowdown that ratcheted up market expectations of aninterest rate cut in the coming months.

The Commerce Department said U.S. home building increased more than expected in April, suggesting declining mortgage rates were starting to provide some support to the struggling housing market.

Another report showed the number of Americans seeking unemployment benefits fell more than expected last week,pointing to sustained labor market strength that should underpin the economy as growth slows.

“We have quite a risk-on asset allocation where people areselling Treasuries and rotating into equities,” O’Rourke said.

U.S. Treasury yields gained and helped the interest rate sensitive financial sector .SPSY rise 1.28%, the most among the S&P sectors.

Investors have also been closely monitoring trade-related news to gauge if the protracted trade dispute could be resolved soon. The two sides are expected to resume talks in Beijing soon.

The recent escalation in tensions have dented a rally instocks this year and has put the benchmark index about 3% belowits all-time high that it hit just two-weeks ago.

At 11:07 a.m. ET the Dow Jones Industrial Average .DJI wasup 244.23 points, or 0.95%, at 25,892.25. The S&P 500 .SPX wasup 33.19 points, or 1.16%, at 2,884.15 and the Nasdaq Composite .IXIC was up 100.46 points, or 1.28%, at 7,922.61.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 8,128.69.

The projected lower bound is: 7,683.09.

The projected closing price is: 7,905.89.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.

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 56.0958. This is not an overbought or oversold reading. The last signal was a sell 12 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 48.65. 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 12 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 buy 1 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 11 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed up 75.899 at 7,898.046. Volume was 6% below average (neutral) and Bollinger Bands were 8% wider than normal.

Open High Low Close Volume___
7,832.5787,946.2307,826.6747,898.046 532,353,184

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

Moving Averages: 10-period 50-period 200-period
Close: 7,912.36 7,861.30 7,532.46
Volatility: 28 18 25
Volume: 563,736,384 563,935,232 581,789,248

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 4.9% 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 5 periods.

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