- Dow Jones rose 197 points, S&P 500 index rose 28 points and Nasdaq Composite gained 126 points to reach a record high of 8,164. Stocks on Friday rebounded from a two-day loss helped by stronger than expected U.S. job creation in April.
- Non-Farm payroll was strong; 263K jobs were added, well above the 185K expectation and unemployment dropped to 3.6% but wages were a tad below expectation. NFP data showed a robust U.S. economy that is growing with tame inflation. This should be good news for the stock market.
- Strong earnings this season have been supporting the markets. More than half of the S&P 500 companies have reported first-quarter earnings and the results have largely topped expectations. According to FactSet, 75% of the S&P 500 companies have beaten earnings estimates.
- Mainland Chinese markets plunged 3% on Monday morning trade following a re-escalation in U.S.-China trade tensions as President Trump tweeted that he would raise tariffs rate on $200 billion of Chinese goods to 25% from current 10%.
- China press reported that China Vice premier Liu He is very unlikely to go to US for trade talk this week, effectively halting trade talks between the 2 largest economies in the world.
Dow Jones Index
(CFD Symbol: US30)
Trend : Bullish
Last : 26,022
Price plunged on Trump’s tariffs tweet but it has managed to stay above the Fibonacci 62% correction point. However, it has declined below the previous strong support at 26,070. MACD is bearish and moving lower, hinting of price moving lower as well. Stochastic has not reached oversold zone as yet, hinting there could be more price decline ahead. Price rally is likely to be capped at 26,176 and supported at 25,871 for now.
Wait for better trade idea.
Hang Seng Index
(CFD Symbol: HK50)
Last : 28,996
Price closed a gap that had supported the bullish trend since late March 2019. The immediate direction could be lower to the next support area at 28,460 if price is unable to recover above 29,427. However, HK50 index is still above the Fibonacci 38% correction point of 2019’s rally. Stochastic is declining from overbought zone and MACD has turned bearish.
Wait for better trading idea
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend : Bullish
Last : 7680
Price has been volatile for the past 4 days and we had highlighted this volatility as a concern in Friday’s note. A top could be forming and a correction could be coming. There is a high chance that Monday’s New York closing could result in an Outside Day chart pattern. This is another warning of a short term correction. A correction is likely to see this index moves lower to 7510. Stochastic is moving down from overbought zone but MACD is still bullish.
Wait for better trading idea and signal
Australian 200 Index
(CFD Symbol: AUS200)
Trend : Bullish
Protective stop :
Price broke below the Fibonacci 62% correction point at 6307 but managed to stay above an important support at 6286. MACD has turned bearish and is moving lower. Stochastic is in neutral range at the moment. Today’s closing could give an indication of the market’s perception of trade talk failure as well as the next direction for global indices.
Wait for better trading idea.