- The Dow closed 140.90 points higher at 25,657.73 on Tuesday. It rose as much as 279.46 points earlier in the day, led by energy stocks but sentiment on Wall Street was dampened by lingering fears that the US economy is slowing down. A drop in Treasury yields also dragged the Dow lower.
- U.S. data pointed to a slowdown in the underlying economy amid soft housing and consumer confidence numbers. Consumer Confidence fell to 124.1 in March from 131.4 in February, well short of economists’ forecasts for a reading of 132. Housing Starts fell 8.7 percent in February, widely missing expectations. Building permits declined, but at a slower rate than forecast by economists.
- Inverted yield curve persisted as benchmark 10-year Treasury yields sat at 2.42 percent in afternoon trading, about 3 basis points below its session’s high. The yield curve inverted amid the release of weak economic data from the U.S. and around the world as well as a downgraded U.S. economic outlook from the Federal Reserve.
- Stocks in Asia slipped in Wednesday morning trade as fears over the global economy continues. Nikkei 225 index was down 130 points but Hang Seng managed to recover into positive ground after opening lower.
- There were 2 recessionary periods since the turn of the century. In 2001 a recession occurred 9 months after the yield curve inversion. In the 2008 bear market, it took 17 months from the start of the inversion before the bear market starts
Dow Jones Index
(CFD Symbol: US30)
Last : 25,669
Price was capped by the 20EMA as well as the Fibonacci 50% correction point. If price stays below this resistance, the trend is likely to be bearish. The index is likely to test the support at 25,350 again. Only a move above 25,800 would hint of more upside. MACD is bearish while Stochastic is still rising from oversold extreme.
Look to sell if price moves towards resistance near 25,670 for a decline to 25,350.
Hang Seng Index
(CFD Symbol: HK50)
Trend : Bearish
Recommendation : Short
Last : 28,751
Target price: 28,160
Protective stop: 29,200
Price is consolidating within a range of 28,800 to 28,450. MACD is still bearish while Stochastic is rising from oversold extreme. Stochastic looks weak. Momentum oscillators are hinting of a bearish trend. 20EMA resistance at 28,910 is likely to cap price advance for a test of 28,200.
Look for a price advance towards 28,900 to get into a short position for a test to 28,200
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend : Neutral
Last : 7365
Price has moved above the 20EMA as well as the Fibonacci 38% support point. However, MACD has yet to turn bullish. Stochastic is rising. We think the rising Stochastic may be able to bring price closer to the previous high at 7506. A move below 7255 would hint of more downside.
Look to buy near the 20EMA support of 7345 for a test of 7440.
S&P 500 Index
(CFD Symbol: US500)
Last : 2822
Protective stop :
The outlook of this chart is very similar to the US Tec. Price is rising and is currently above the 20EMA. However, MACD is still bearish. Stochastic is rising. There is a chance the rising Stochastic can bring price higher to 2850. A move below 2782 would hint of more downsides.
A short term trade idea would be to buy near the 20EMA support at 2820 for a test of 2850.