NASDAQ Composite (.IXIC) turned lower
Major market indexes opened the week on a sour note led lower by the Dow Jones Industrial Average as health care and financial stocks tumbled.
The Dow fell 0.8%, weighed down by losses in UnitedHealthcare ( UNH ) and Walgreens Boots Alliance ( WBA ). The S&P 500 fell 0.4% while the Nasdaq Composite Index slipped 0.2%.
Stocks had opened higher on optimism that trade peace might be near between the US and China. The Wall Street Journal reported on Sunday that the two economic giants were near a deal and other news outlets also reported progress in the discussions. However, the early positive mood dwindled as economic news in part prompted investors to start selling.
December construction spending was weaker than anticipated, falling 0.6% compared with the consensus estimate projecting a rise of 0.3%. In November, construction spending rose 0.8%.
Investors have several economic reports to digest this week, including new home sales on Tuesday and the monthly employment report on Friday.
Dow Jones Industrial Average was down 206.67 points (-0.79%)
S&P 500 was down 10.88 points (-0.39%)
Nasdaq Composite Index was down 17.79 points (-0.23%)
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 7,301.93.
The projected upper bound is: 7,890.32.
The projected lower bound is: 7,296.56.
The projected closing price is: 7,593.44.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 white candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with NASDAQ COMPOSITE). It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 63.9798. This is not an overbought or oversold reading. 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 67.59. 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 45 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 97. This is not a topping or bottoming area. The last signal was a sell 0 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 2 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed down -17.786 at 7,577.567. Volume was 5% above average (neutral) and Bollinger Bands were 51% narrower 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: 7,532.68 7,099.24 7,478.04
Volatility: 8 28 25
Volume: 595,190,912 606,417,920 569,844,096
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 1.3% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of .IXIC at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .IXIC and have had this outlook for the last 36 periods.