S&P 500, NASDAQ Composite (.IXIC) end choppy session lower

S&P 500, NASDAQ Composite (.IXIC) end choppy session lower

S&P 500, NASDAQ Composite (.IXIC) end choppy session lower

Wall Street stocks finished a choppy session mostly lower on Tuesday (Jan 14) as earnings season opened with mixed banking results ahead of a US-China trade agreement.

Stocks were bruised by an early afternoon Bloomberg News report that said the United States could maintain tariffs on more than US$300 billion in Chinese goods past November 2020.

The report came a day before US and Chinese representatives are set to sign a partial trade deal in which the Washington agreed not to impose additional tariffs and to reduce tariffs on about US$120 billion of goods.

The Dow Jones Industrial Average ended up 33.62 points (0.11 per cent) at 28,939.67.

The broad-based S&P 500 dipped 4.98 points (0.15 per cent) to 3,283.15, while the tech-rich Nasdaq Composite Index also shed 22.60 points (0.24 per cent) to 9,251.33.

Both the S&P 500 and Nasdaq had finished at all-time highs on Monday, the latest records in a run boosted by improved US-China trade relations, central bank easing and solid US economic data.

Some investors have been expecting a pullback following the surge in recent weeks that have left the market in what analysts have called an “overbought” condition.

JPMorgan Chase and Citigroup both advanced more than one per cent after reporting better-than-expected fourth-quarter results on growth in their credit card businesses and much improved results in trading.

But Wells Fargo sank 5.4 per cent as the bank missed earnings expectations and new Chief Executive Charles Scharf suggested a turnaround will take longer than expected.

Delta Air Lines surged 3.3 per cent after reporting better-than-expected fourth-quarter profits on strong consumer demand and lower fuel costs.

Technical Indicators

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 8,787.18.

The projected upper bound is: 9,412.22.

The projected lower bound is: 9,128.80.

The projected closing price is: 9,270.51.

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 28 white candles and 22 black candles for a net of 6 white candles.

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 86.3760. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 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 74.45. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 7 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 135.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 7 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 20 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed down -22.603 at 9,251.329. Volume was 13% above average (neutral) and Bollinger Bands were 15% wider than normal.

Open     High      Low     Close     Volume___
9,270.6099,298.3269,226.4869,251.329 624,219,648
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 9,126.24 8,739.83 8,176.21
Volatility: 12 10 18
Volume: 608,256,704 570,460,416 550,042,688

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 13.1% above its 200-period moving average and is in an upward trend. Volatility is Our volume indicators reflect very strong flows of volume into .IXIC (bullish). Our trend forecasting oscillators are currently bullish on .IXIC and have had this outlook for the last 60 periods. Our momentum oscillator is currently indicating that .IXIC is currently in an overbought condition.

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