NASDAQ Composite (.IXIC) – Tech, financial shares lead surge to record highs
The record-setting rally in U.S. equities accelerated in the wake of Wednesday’s China trade deal and signs consumer demand remains strong. Bond yields rose.
All three main U.S. stock benchmarks surged to all-time highs after setting multiple records earlier this week, with technology and financial shares leading the surge. Alphabet Inc.’s market valuation hit $1 trillion for the first time. Banks and chipmakers rallied after solid earnings reports from Taiwan Semiconductor Manufacturing Co. and Morgan Stanley. Treasuries fell after data showed U.S. retail sales strengthened in December, while the dollar gained.
“The consumer is really in positive shape,” said Ryan Detrick, senior market strategist at LPL Financial. “Then when you factor in the alleviation of the U.S.-China tensions, the market is in a pretty good spot.”
The Senate approved President Donald Trump’s U.S.-Mexico-Canada free trade agreement, handing the president a major political win on the same day senators were sworn in as jurors in his impeachment trial.
The formal signing of a phase one deal between the world’s two biggest economies has put the trade war on hold as far as many investors are concerned. Assuming the detente lasts, traders will be seeking fresh catalysts, most likely in economic data and the ramp-up of earnings season.
“The question is if we can keep up the momentum,” said Mike Loewengart, vice president of investment strategy at E*Trade Financial. “Up next, housing, an economic bellwether, which will provide yet another data point of how our economy closed out the year.”
West Texas crude fluctuated in a narrow range before pushing higher.
Elsewhere, the Stoxx Europe 600 index closed at a record high after swinging between gains and losses. The euro erased earlier gains, while most European bonds edged up. The ruble slipped in the wake of Russian President Vladimir Putin’s call for sweeping constitutional changes and subsequent replacement of his long-serving prime minister.
Meanwhile, soybeans slumped overnight after China signaled purchases would be based on demand, rather than a pre-set amount.
Here are some events to watch for this week:
–China GDP, along with key monthly data for December, come on Friday.
–A final reading on the euro-zone’s December inflation is also due on Friday.
There are some of the main moves in markets:
-The S&P 500 index jumped 0.8% to 3,316.89 as of 4:03 p.m. New York time, the highest on record with the largest climb in two weeks.
-The Dow Jones Industrial Average jumped 0.9% to 29,297.57, the highest on record with the biggest increase in two weeks.
-The Nasdaq Composite index climbed 1.1% to 9,357.13, the highest on record with the largest surge in two weeks.
-The Stoxx Europe 600 index climbed 0.2% to 420.54, the highest on record.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 8,834.84.
The projected upper bound is: 9,517.34.
The projected lower bound is: 9,233.88.
The projected closing price is: 9,375.61.
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.
A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 11 rising windows in the last 50 candles–this makes the current rising window even more bullish.
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 84.6440. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 7 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 78.48. 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 9 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 133.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 9 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 22 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed up 98.436 at 9,357.131. Volume was 3% above average (neutral) and Bollinger Bands were 21% 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: 9,181.34 8,775.76 8,190.90
Volatility: 11 10 18
Volume: 602,453,824 571,996,352 550,554,304
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 gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
NASDAQ COMPOSITE is currently 14.2% above its 200-period moving average and is in an upward trend. Volatility is Our volume indicators reflect very strong flows of volume into .IXIC (bullish). Our trend forecasting oscillators are currently bullish on .IXIC and have had this outlook for the last 62 periods. Our momentum oscillator is currently indicating that .IXIC is currently in an overbought condition. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.