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NASDAQ Composite (.IXIC) – Traders now expect the Federal Reserve to cut interest rates for a second time this month


NASDAQ Composite (.IXIC) – Traders now expect the Federal Reserve to cut interest rates for a second time this month

Wall Street rebounded on Tuesday as investors pinned their hopes on policy easing by major central banks and governments after global markets plummeted in the previous session on fears of a coronavirus-driven recession. Traders now expect the Federal Reserve to cut interest rates for a second time this month, with President Donald Trump piling more pressure by saying that the central bank should bring US interest rates down to the level of “competitor nations.”

Meanwhile, Japan unveiled a $4 billion package to combat the coronavirus outbreak.

More than 114,300 people have now been infected by the coronavirus globally and over 4,000 have died, according to a Reuters tally of government announcements

“If they get any sign that this coronavirus is not as devastating economically, then this market can rip higher.”

The three main US stock indexes suffered their worst day since the 2008 financial crisis on Monday as oil prices plunged following pledges by top producers Saudi Arabia and Russia to increase output in an over-supplied market.

The selloff was so sharp it triggered trading halts put in place in the wake of 1987’s “Black Monday” crash, with the blue-chip Dow Jones shedding as much as 2,000 points and the indexes edging toward a bear market.

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 8,866.42.

The projected lower bound is: 7,794.96.

The projected closing price is: 8,330.69.


A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

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 21.3546. This is not an overbought or oversold reading. The last signal was a buy 6 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 38.13. This is not a topping or bottoming area. However, the RSI just crossed above 30 from a bottoming formation. This is a bullish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 0 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 -120.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 6 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 sell 12 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed up 393.577 at 8,344.253. Volume was 75% above average (neutral) and Bollinger Bands were 244% wider than normal.

Open     High      Low     Close     Volume___
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 8,637.81 9,200.95 8,421.43
Volatility: 75 39 25
Volume: 1,081,114,880 702,106,112 589,510,336

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 0.9% below 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 moderate flows of volume out of .IXIC (mildly bearish). Our trend forecasting oscillators are currently bearish on .IXIC and have had this outlook for the last 10 periods.

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S. Jack Heffernan Ph.D. Economist at Knightsbridge holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Crypto, Mining, Shipping, Technology and Financial Services.