NASDAQ Composite (.IXIC) will look to hold above the 200-day moving average ahead of ISM services data

NASDAQ Composite (.IXIC) will look to hold above the 200-day moving average ahead of ISM services data

NASDAQ Composite (.IXIC) will look to hold above the 200-day moving average ahead of ISM services data

The Nasdaq 100 is down nearly 2% from its Monday open after Tuesday’s ISM manufacturing data revealed the sector contracted further in September. The findings worked to exacerbate recessionary fears and has battered risk appetite ahead of two critically important upcoming data pieces. While manufacturing accounts for roughly 15% of the US economy, services make up about 75% of GDP – affording it a much greater share of the measure. Further, US non-farm payrolls are slated to be released on Friday. Consequently, stocks will have a busy conclusion to the first week of October which has already proved volatile.

Ahead of the data, the Nasdaq 100 will look to stem the bleeding as it awaits the next fundamental catalyst. With recent price action, the Index’s leaning looks to be lower, so support at 7528 should be watched closely. While the support offered by the Fibonacci level may not posses the technical merit to rebuke a concerted effort lower, it may provide price indecision on an intraday basis as it did Wednesday.

On the other hand, the 200-day moving average around the 7385 level – aligning with the Nasdaq’s swing low in August – could be looked to as the “line in the sand.” A breach of this area would seriously undermine a bullish continuation and would likely open the door to deeper losses, potentially targeting the Index’s June lows at 6940.

Should risk appetite reemerge on the back of strong data or another fundamentally bullish development, the Nasdaq will have to negotiate support-turned resistance. To that end, 7685 may pose the first barrier, followed by the 50-day moving average and the upper bound of the Index’s August range around 7775. While the market has seemingly regained its footing in Wednesday trading, the combination of heightened volatility, upcoming data and the memory of last October, has worked to eviscerate bullish sentiment.

Technical Indicators

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 7,994.88.

The projected upper bound is: 8,073.77.

The projected lower bound is: 7,478.07.

The projected closing price is: 7,775.92.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black 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 4 falling windows in the last 50 candles–this makes the current falling window even more bearish.

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 20.9588. This is not an overbought or oversold reading. The last signal was a buy 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 36.23. 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 84 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 -196.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 13 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 sell 6 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed down -123.439 at 7,785.246. Volume was 12% above average (neutral) and Bollinger Bands were 22% narrower than normal.

Open     High      Low     Close     Volume___
7,851.1347,852.7007,744.9557,785.246 629,675,456
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 8,014.76 8,022.42 7,708.32
Volatility: 17 24 23
Volume: 630,836,928 561,014,464 574,453,568

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 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 1.0% above its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. 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 0 periods.

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