Market News
- Dow Jones fell 162 points while the Nasdaq Composite index was down 45 points. S&P 500 fell 22 points after hitting another historical high during the day as strong quarterly corporate earnings coupled with a strong ADP jobs data had boosted sentiment. Stocks fell on Wednesday after Fed Chairman Powell hinted that rates cut may not be on the cards.
- Fed Chairman Jerome Powell said in a news conference that recent low inflationary influences may only be “transitory,” dashing hopes the central bank was at least entertaining the idea of a rate cut because of tame inflation.
- Expectation of a Fed’s rate cut by Dec 2019 had risen to 65.4%, based on trading in the Fed Fund futures market prior to FOMC’s meeting. Powell has altered this view with his comments.
Market Views
- Asian stock markets were mixed on Thursday morning following Powell’s hint that the central bank was not considering a cut in rate. Australian market was down 40 points but markets in Japan and China are closed for a holiday.
- CNBC reported on Wednesday that a U.S.-China trade deal could be announced by next Friday. It was reported that tariffs would be cut to 10% from 25% immediately on US$200 billion of goods and tariffs would be phased out over time.
Dow Jones Index
(CFD Symbol: US30)
Trend : Bullish
Recommendation :
Last : 26,411
Target price:
Protective stop:
Outlook
Price reached Fibonacci 161.8% projection target and experienced a sharp decline on Powell’s comment but has managed to above an important trend line support. A break would have triggered a Double Top chart pattern and a reversal of trend. If price can stay above this support, price is likely to test the high again. MACD and Stochastic have declined in line with price without any divergence.
Trading Idea
Wait for better trade idea.
Hang Seng Index
(CFD Symbol: HK50)
Trend : Bullish
Recommendation :
Last : 29,899
Target price:
Protective stop:
Outlook
This index is again moving in another sideway consolidation, just above the previous high of 29,668. MACD is rising at the moment but Stochastic is neutral, being in the middle of its range. With China on holiday, this index may stay in a range for the rest of the week.
Trading Idea
Wait for better trade signals
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend : Bullish
Recommendation :
Last : 7750
Target price
Protective stop:
Outlook
This index has exceeded its Fibonacci 161.8% target and in the past 3 days, its volatility has also increased. The volatile nature could be a warning of a possible correction coming. MACD has turned bearish but Stochastic has not reached its oversold extreme as yet. There could be more downside risk ahead. A break of support at 7711 could be the first sign of a bigger correction.
Trading Idea
Wait for better trading idea and signal
S&P 500 Index
(CFD Symbol: US500)
Trend : Bullish
Recommendation :
Last : 2922
Target price:
Protective stop :
Outlook
Price made a new historical high of 2958 last night before Powell’s comments send this index lower. On the daily chart, there is a Key Reversal Day chart pattern and this is a reversal pattern. This index has also exceeded its 161.8% Fibonacci projection target. There could be a correction ahead in the coming few days. Wait for confirmation of this Reversal Day chart pattern.
Trading Idea
Wait for better trading idea.
