NASDAQ Composite (.IXIC) under tremendous pressure early Monday after President Donald Trump threatened new tariffs on Chinese goods
President Donald Trump’s weekend tweets threatening new tariffs on Chinese goods sent global markets into what one firm called a “risk-off frenzy” on Monday morning.
The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all fell between 1.5% and 2%, with the Dow opening lower by more than 400 points as traders worry the ongoing US-China trade war could drag on without a resolution.
On Sunday, Trump tweeted he would increase tariffs from 10% to 25% on $US200 billion worth of Chinese goods and slap a fresh 25% tariff on an additional $US325 billion worth of Chinese goods. The changes are set to go into effect on Friday, he said.
“The United States has been losing, for many years, 600 to 800 Billion Dollars a year on Trade,” the president added on Monday morning. “With China we lose 500 Billion Dollars. Sorry, we’re not going to be doing that anymore!”
UBS economists said Trump’s tweets were exactly the opposite of his statements just last Friday, when he said talks between Washington and Beijing to end the trade war were going ‘very well.’”
The violent reaction in US equity markets has interrupted their impressive comeback from the historic sell-off that took place during the fourth quarter.
This year’s rally has been fuelled in part by the Federal Reserve‘s dovish posture, signs the domestic economy is on solid footing, and optimism the US and China could reach a trade deal. The S&P 500 was up 17.5% this year through Friday’s market close.
Some of the more trade-sensitive corners of the market fell under intense pressure Monday morning, notably emerging-market equities, semiconductors, and US companies with particularly large exposure to China.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 8,305.60.
The projected lower bound is: 7,964.80.
The projected closing price is: 8,135.20.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
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 67.1282. This is not an overbought or oversold reading. 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 63.14. 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 11. This is not a topping or bottoming area. The last signal was a sell 4 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 3 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed down -40.707 at 8,123.289. Volume was 9% below average (neutral) and Bollinger Bands were 48% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 8,111.89 7,813.49 7,530.68
Volatility: 14 14 25
Volume: 524,938,976 569,379,520 577,696,640
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 7.9% above its 200-period moving average and is in an upward 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 bullish on .IXIC and have had this outlook for the last 80 periods.
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