NASDAQ Composite (.IXIC) wavers as Apple tees up its quarterly report

NASDAQ Composite (.IXIC) wavers as Apple tees up its quarterly report

NASDAQ Composite (.IXIC) wavers as Apple tees up its quarterly report

Wall Street was mixed on Tuesday, with technology shares dipping ahead of Apple’s quarterly report while a rebound in 3M and other industrials elevated the Dow Jones Industrial Average.

Apple declined 1.04 percent as investors awaited the iPhone maker’s results after the bell following its warning earlier this month about soft demand in China, whose economy has been damaged by a trade war with the United States.

The Fed is widely expected to leave rates unchanged on Wednesday, and investors will look to Friday’s January jobs report for clues about the pace of future inflation.

“It’s a day of indecision. Between earnings due out after hours today and the Fed tomorrow, and then the employment report coming up, I don’t think anyone wants to make a big bet ahead of all that news,” said Willie Delwiche, an investment strategist at Baird.

The S&P industrials index, which took a beating after a warning from Caterpillar on Monday, rebounded 1.74 percent, helped by better-than-expected reports from 3M Co and defense companies.

Amazon.com Inc, Facebook Inc and Microsoft Corp, all part of a wave of quarterly reports later this week, fell more than 2 percent each.

The S&P technology index lost 1.01 percent.

Analysts on average expect S&P 500 companies’ aggregate earnings per share to have risen 14.2 percent in the fourth quarter. But with U.S. corporate tax cuts now a year old, 2019 earnings are seen rising a more moderate 5.6 percent.

As Washington and Beijing officials prepare for a high-level trade meeting this week, the Justice Department leveled charges against Chinese telecom giant Huawei, potentially casting a cloud on the talks.

The Dow Jones Industrial Average climbed 0.21 percent to end at 24,579.96 points, while the S&P 500 lost 0.15 percent to 2,640, dragged down by technology and communications stocks. The Nasdaq Composite dropped 0.81 percent to 7,028.29.

Defense contractors L3 Technologies Inc jumped 8.44 percent and Harris Corp climbed 8.78 percent after topping quarterly earnings estimates.

3M rose 1.94 percent after its fourth-quarter results topped estimates, even as the Post-It notes maker trimmed its 2019 earnings outlook, saying that a slowdown at its Chinese business was hurting revenue.

Harley-Davidson Inc dropped 5.05 percent after the motorcycle maker reported a lower-than-expected quarterly profit, hit by declining sales in the United States.

Allergan Plc fell 8.55 percent after the Botox maker forecast 2019 revenue below expectations.

Advancing issues outnumbered declining ones on the NYSE by a 1.42-to-1 ratio; on Nasdaq, a 1.23-to-1 ratio favored decliners.

The S&P 500 posted 10 new 52-week highs and one new low; the Nasdaq Composite recorded 31 new highs and 29 new lows.

Volume on U.S. exchanges was 6.7 billion shares, compared with the 7.6 billion-share average over the last 20 trading days.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 7,399.39.

The projected lower bound is: 6,650.29.

The projected closing price is: 7,024.84.

Candlesticks

A black body occurred (because prices closed lower 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.

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 Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 62.1136. This is not an overbought or oversold reading. The last signal was a sell 5 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 53.01. 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 22 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 18. This is not a topping or bottoming area. The last signal was a sell 1 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 18 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed down -57.395 at 7,028.290. Volume was 21% below average (neutral) and Bollinger Bands were 4% narrower than normal.

Open High Low Close Volume___
7,087.4937,092.2887,011.4667,028.290 498,853,856

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 7,069.86 6,942.62 7,452.20
Volatility: 21 35 25
Volume: 558,721,856 619,630,016 558,222,656

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.

Summary

NASDAQ COMPOSITE is currently 5.7% 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 13 periods.

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