Tech Lifts NASDAQ Composite (.IXIC) to Record as Retail Drags on Dow: Markets Wrap

Tech Lifts NASDAQ Composite (.IXIC) to Record as Retail Drags on Dow: Markets Wrap

Tech Lifts NASDAQ Composite (.IXIC) to Record as Retail Drags on Dow: Markets Wrap

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The Nasdaq Composite climbed to a fresh record on the back of gains in megacap tech companies even as the Dow Jones Industrial Average sank following disappointing reports from retailers.

Gains in Facebook, Broadcom and Tesla lifted the Nasdaq while Home Depot was the biggest drag on the Dow after the company cut its annual forecast for the second time this year. Investors also mulled the implications of a report that U.S. and Chinese negotiators may link the size of tariff rollbacks to terms set during talks in May. Ten-year Treasury yields dipped below 1.8%, while oil tumbled for a second day.

The dollar edged higher against its major peers after President Donald Trump said he “protested” U.S. interest rates that he considers too high in a meeting with Federal Reserve Chairman Jerome Powell at the White House. The Fed said Powell’s remarks were “consistent” with his recent public comments.

Investors remain sensitive to any signs of whether U.S. consumers can continue supporting economic growth and are looking for developments on trade after months of closely watched negotiations. One challenge for stocks across developed markets lies in the MSCI World Index’s 21% advance this year, which has propelled the benchmark to its highest estimated price-earnings ratio since 2017.

”More and more people are concluding that the economy has some strength, that it’s strong enough to support rising stock prices,” said Kate Warne, an investment strategist at Edward D Jones & Co. in St. Louis. “While consumer spending is falling, it’s not falling off a cliff. Overall most of the news has been good, investors are feeling more confident.”

Elsewhere, European stocks ended lower. Equities fell in Tokyo and climbed in Shanghai. Gold held steady.

Here are some key events coming up this week:

U.S. economic indicators due for release include initial jobless claims on Thursday.Britain holds its first televised leadership debate before next month’s election Tuesday.Federal Reserve speakers this week include district bank presidents John Williams, Loretta Mester and Neel Kashkari.European central bankers speaking this week include European Central Bank President Christine Lagarde, Bundesbank chief Jens Weidmann, along with Yves Mersch, Luis de Guindos, Pablo Hernandez de Cos and Philip Lane.China announces its loan prime rates, a benchmark for borrowing costs, on Wednesday.

These are the main moves in markets:

Stocks

The S&P 500 Index slipped less than 0.1% at the close of trade in New York; the Nasdaq Composite gained 0.2%; the Dow fell 0.4%.The Stoxx Europe 600 Index fell 0.1%The MSCI Emerging Market Index gained 0.4%.

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 8,256.87.

The projected upper bound is: 8,764.31.

The projected lower bound is: 8,396.46.

The projected closing price is: 8,580.39.

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 29 white candles and 21 black candles for a net of 8 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 92.4179. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 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 72.74. 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 buy 118 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 152.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 27 period(s) ago.

Rex Takasugi – TD Profile

NASDAQ COMPOSITE closed up 20.720 at 8,570.658. Volume was 0% above average (neutral) and Bollinger Bands were 2% narrower than normal.

Open     High      Low     Close     Volume___
8,578.0168,589.7598,536.7278,570.658 533,690,592
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 8,489.34 8,189.65 7,938.86
Volatility: 5 15 18
Volume: 530,432,800 528,994,624 552,067,456

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 8.0% above 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 23 periods. Our momentum oscillator is currently indicating that .IXIC is currently in an overbought condition.

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