NASDAQ Composite (.IXIC) – Wall Street tanks, enters ‘bear market’ on virus fears
Wall Street stocks suffered another brutal rout Wednesday, pushing the Dow into a “bear market” after the latest series of event cancelations and company warnings rattled investors.
The Dow Jones Industrial Average plunged around 1,465 points, or 5.9 percent, to 23,553.22.
The broad-based S&P 500 slumped 4.9 percent to 2,741.38, while the tech-rich Nasdaq Composite Index shed 4.7 percent to 7,952.05.
Wednesday’s session puts the Dow down more than 20 percent from its peak, making it a bear market.
The latest announcements included the cancelation of the Houston Rodeo and the World Figure Skating Championships, which had been scheduled to take place in Montreal.
Washington state and San Francisco announced bans on mass events, while hotel chain Hilton became the latest big company to withdraw its earnings forecast due to the clouded economic forecast.
“All these announcements coming out are sending people running for the hills,” said Maris Ogg of Tower Bridge Advisors. “It’s still gonna take some time until the market gets past the panic.”
The World Health Organisation called the new coronavirus outbreak a pandemic, issuing a grim warning that the global spread and severity of the illness was due to “alarming levels of inaction”.
While stocks rallied on Tuesday, equities have been on a broad downward trend for the last three weeks or so as the coronavirus has morphed from a China problem to a global worry, threatening the 11-year “bull” market for US stocks.
There have been more than 124,000 confirmed cases of the virus, with more than 4,500 fatalities as the virus has spread to more than 100 countries and territories.
US Treasury Secretary Steven Mnuchin told a congressional panel the administration was “working full time” on a package, although key lawmakers balked at a payroll tax relief plan floated by the administration.
Travel-linked stocks remained an especially ugly sector, with Marriott International down 9.0 percent, United Airlines 6.1 percent and Expedia 10.8 percent.
Boeing was the biggest loser in the Dow, slumping 18.2 percent as it announced it was suspending most hiring and overtime pay as it works to conserve cash in the face of twin crises: the grounding of the 737 MAX and a massive slowdown in travel due to coronavirus.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 8,489.80.
The projected lower bound is: 7,372.12.
The projected closing price is: 7,930.96.
A black body occurred (because prices closed lower 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.
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 15.8950. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 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 33.32. 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 1 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 -140.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 7 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 13 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed down -392.202 at 7,952.051. Volume was 64% above average (neutral) and Bollinger Bands were 258% wider than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 8,534.94 9,179.86 8,423.01
Volatility: 78 41 26
Volume: 1,100,497,024 714,526,144 592,717,184
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 5.6% 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 11 periods.