NASDAQ Composite (.IXIC) – Wall Street gains as job losses stir talk of more stimulus
Wall Street gained more ground on Thursday as the record weekly jobless claims came in below investors’ worst fears, but added to the case for more stimulus to combat the economic impact of the coronavirus pandemic.
Initial claims for unemployment benefits rose to 3.28 million last week as lockdowns across the country brought economic activity to a sudden halt and unleashed a wave of layoffs, but were still below estimates ranging as high as 4 million.
“It’s unprecedented and the highest it’s been since the metric even began in the ’60s,” said Mike Loewengart, managing director, investment strategy at E*Trade Financial in New Jersey.
“That said, it’s no secret that times will be tough on the jobs front for the foreseeable future, so even a number this large is relatively priced in. The real question at hand now is if the current stimulus package is enough to give Americans the support they need.”
Federal Reserve Chair Jerome Powell said on Thursday the central bank would act “aggressively” to keep firms and families afloat, after already announcing an unprecedented policy easing earlier this week.
Meanwhile, the U.S. Senate passed a whopping $2 trillion stimulus package to aid distressed industries and millions of Americans devastated by the health crisis.
The S&P 500 is now on pace for its third straight session of gains, the index’s longest run since Feb. 12, but has only recouped a fraction of the nearly $8 trillion in value lost since a record high last month as the pandemic showed no signs of peaking.
Traders expect more wild swings as fears of a deep and lasting global recession and corporate defaults rage amid a breakdown in business activity.
“This is the beginning of the really bad numbers we’re going to see for the foreseeable month,” said Subadra Rajappa, head of U.S. rates strategy at Societe Generale in New York.
The CBOE volatility index fell 4.4 points in early trading, but was still near levels far above those in 2018 and 2019.
United Airlines, Delta and American Airlines rose between 5.4% and 8%, while Boeing rose 7% as the U.S. Senate aid bill included a $58 billion provision for the aerospace industry.
At 10:00 a.m. ET, the Dow Jones Industrial Average was up 631.29 points, or 2.98%, at 21,831.84, the S&P 500 was up 75.07 points, or 3.03%, at 2,550.63. The Nasdaq Composite was up 194.36 points, or 2.63%, at 7,578.66.
All 11 major S&P sectors was trading higher, with a 2.9% gain in technology stocks providing the biggest boost.
Advancing issues outnumbered decliners nearly 5-to-1 on the NYSE and 4-to-1 on the Nasdaq.
The S&P index recorded no new 52-week high or low, while the Nasdaq logged one new high and six new lows.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 8,638.71.
The projected upper bound is: 8,669.73.
The projected lower bound is: 6,867.19.
The projected closing price is: 7,768.46.
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.
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 90.0266. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 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 47.52. 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 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 50. This is not a topping or bottoming area. The last signal was a buy 5 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 1 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed up 413.242 at 7,797.537. Volume was 37% above average (neutral) and Bollinger Bands were 199% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 7,259.46 8,771.62 8,403.92
Volatility: 123 74 40
Volume: 1,233,834,496 856,663,808 629,377,408
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 7.2% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. 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 22 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.