Market News
- US equities alternated between gains and losses for most of Monday. The Dow eked out a small gain closing 14.51 points higher at 25,516.83. Gains were capped as worries over the global economy and bond yields. Inverted yield curve persisted for a 2nd day with the 10-year yields dropping below Fed fund rate
- Worries over the global economic outlook were raised on Friday after the yield curve inverted. Investors consider this to be a signal that a recession may be coming soon especially when it stays for an extended period of time.
- Economies in Europe and China continue to deteriorate causing uneasiness that the problems overseas could affect the US market. A better IFO report in Germany on Monday helped to alleviate some worries.
Market View
- Asian markets recovered from the previous day’s heavy losses this morning. Both Nikkei 225 and Hang Seng index eked out gains while the Australian 200 was negative.
- Market is clouded with inverted yield curve and recession fears. US and China begin trade talks later in the week and this could be a source to lift the gloom from inverted yield curve and recession with both sides expected to strive a deal sometime in April.
Dow Jones Index
(CFD Symbol: US30)
Trend : Bearish
Recommendation : Short
Last : 25,631
Target price: 25,250
Protective stop: 25,800
Outlook
Price recovered on Monday night following last Friday’s decline but the decline does not look completed. There could be another decline to 25,260. MACD is still bearish and there were no divergence warning given. 20EMA is flat but price is still below the 20EMA. Fibonacci 161.8 price target is at 25,260.
Trading Idea
Look to sell if price moves towards resistance near 25,700 for a decline to 25,250 to complete a possible decline.
Hang Seng Index
(CFD Symbol: HK50)
Trend : Bearish
Recommendation : Short
Last : 28,716
Target price: 28,065
Protective stop: 29,316
Outlook
Price opened higher this morning, closing the gap but has since declined below the gap area. MACD’s trend is strong and bearish at the moment and we are expecting Stochastic to stay oversold for a prolong period of time. 20EMA is at 28,952 and is acting as resistance and inability to surpass this resistance will likely bring price lower to 28,065.
Trading Idea
Look to get into a short position on a rally to 28,748 for a test to 28,065.
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend : Neutral
Recommendation :
Last : 7345
Target price:
Protective stop:
Outlook
Price managed to recover last night but we may be looking at another decline. Index has completed the rally as it reached 161.8% of its Fibonacci target. This should be followed by 3 moves and we could be in the middle of the 2nd move with another decline likely in store ahead. MACD is still bearish but could be about to turn bullish. Stochastic is moving out of the oversold extreme. Both indicators are not giving us much information at the moment.
Trading Idea
Watch the reaction at 7380 to 7410 for clue to trend direction. If price is capped at this zone, the trend is likely to be bearish.
Nikkei 225 Index
(CFD Symbol: JP225)
Trend :
Recommendation :
Last : 21,045
Target price:
Protective stop :
Outlook
Price has come back into the congestion area, recovering from the low of 20,883. MACD is still bearish at the moment. Stochastic is rising. At the present moment, it is unclear which direction the index is going to move.
Trading Idea
Wait for better trend direction. Short term trader can take advantage of the rising momentum for a ride to the resistance at 21,650.
