NASDAQ Composite (.IXIC) Wall Street rattled by Caterpillar, Nvidia warnings
U.S. stocks slumped on Monday, as warnings from Caterpillar Inc CAT.N and Nvidia Corp NVDA.O added to concerns about a slowing Chinese economy and tariffs taking a toll on corporate profits.
Shares of Caterpillar, the world’s largest heavy equipment maker, fell 9.3 percent after its quarterly profit widely missed Wall Street estimates, hit by softening demand in China and higher manufacturing and freight costs.
The company’s shares were on track for their worst day since August 2011, accounting for nearly a quarter of the Dow’s fall.The S&P industrial index .SPLRCI dropped 1.4 percent.
Nvidia tumbled 13.8 percent after the chip maker cut its fourth-quarter revenue estimate by half a billion dollars on weak demand for its gaming chips in China and lower-than-expected data center sales.
The Philadelphia semiconductor index .SOX fell 2.1percent, while the S&P technology index .SPLRCT dropped 1.8percent.
“Every time we get earnings stating China as a problem,investors start to realize that issues with China are going tospread and without China growing at a good clip it will be hardfor the global economy and the U.S. to continue an expansion,”said Ryan Nauman, market strategist at Informa FinancialIntelligence in Zephyr Cove, Nevada.
Global stocks started on the back foot after China datashowed earnings at industrial firms shrank for a second straightmonth in December, hit by slowing prices and weak factoryactivity amid a protracted trade war with the United States.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 7,457.22.
The projected lower bound is: 6,709.54.
The projected closing price is: 7,083.38.
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 27 white candles and 23 black candles for a net of 4 white candles.
A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 3 falling windows in the last 50 candles–this makes the current falling window even more bearish.
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).
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is 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 67.7211. 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 55.83. 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 21 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 52. 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 buy 17 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed down -79.179 at 7,085.685. Volume was 8% below average (neutral) and Bollinger Bands were 4% wider than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 7,057.63 6,946.07 7,452.76
Volatility: 21 35 25
Volume: 558,009,216 621,552,576 557,975,360
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 down today (bearish) 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 4.9% below 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 moderate flows of volume into .IXIC (mildly bullish). Our trend forecasting oscillators are currently bullish on .IXIC and have had this outlook for the last 12 periods.
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