Market News
- Dow rallied more than 200 points as Wall Street continued rebounding from early August sell-off as Treasury yields rebounded, quelling fears of a possible recession. Equities also got a boost after Washington agreed to extend a temporary reprieve to Chinese telecom giant Huawei.
- Dow Jones closed 249 points higher to 26,135 while S&P 500 rose 34 points to close at 2,923. The Nasdaq Composite was up 106 points, closing higher at 8,002, resulting from the rise in Apple shares after Trump said Apple CEO made a “good case” that it would be hard for Apple to pay tariffs, when Samsung does not face the same level of duties given its manufacturing in South Korea.
- The president and chief investment strategist at Yardeni Research thought it might be premature to call for a recession now as the inverted yield curve can be misleading, having given three false signals of a recession over the past ten times.
Market Views
- Asian shares extended their gains on Tuesday as hopes for stimulus in major economies tempered anxiety about a global recession, helping boost the equities markets. Nikkei 225 index rose 79 points while Hang Seng index declined 56 points.
- Hopes for additional stimulus are rising after reports that Germany is prepared to increase fiscal spending, and after the People’s Bank of China took steps to lower corporate borrowing costs. Senior White House officials are discussing a temporary payroll tax cut to boost the economy as well, reported by the Washington Post on Monday.
Dow Jones Index
(CFD Symbol: US30)
Trend : Bearish
Recommendation : Short
Last : 26,124
Target price:
Protective stop:
Outlook
Price has been rebounding for three consecutive days after hitting a low at 25,233. We are expecting the 50EMA, which is around the mid-June low resistance level, to provide resistance and halt the rebound. If the index cannot surpass the mid-June resistance, it is heading towards its previous low point at 24,603 again, while a break will target the top at 27,403. Stochastic is rising but MACD is bearish with both of MACD’s lines below the zero line.
Trading Idea
Wait for better trading idea
Hang Seng Index
(CFD Symbol: HK50)
Trend :
Recommendation :
Last : 25,263
Target price:
Protective stop:
Outlook
Price reached a low at 24,941 and rebounded, forming a Harami candlestick pattern last Thursday. Price is now testing the 20EMA resistance point. We expect the 20EMA to provide resistance and to halt the rebound. However, the rebound could head towards the Fibonacci 50% retracement point at 26,910 should price manage to break above 20EMA. Stochastic is in the oversold extreme but is turning up. MACD is still bearish.
Trading Idea
Wait for better trading idea.
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend :
Recommendation :
Last : 7726
Target price :
Protective stop:
Outlook
Price managed to close above the downtrend line with a bullish green candlestick last Friday. Price tested and closed above the 20EMA last night. The index could be heading towards its previous high of 7780. Stochastic is flat and neutral at the moment but could turn up again in the coming sessions. MACD is still bearish with both of MACD’s lines below the zero line
Trading Idea
Wait for better trading idea
Australian 200 Index
(CFD Symbol: AUS200)
Trend :
Recommendation :
Last : 6572
Target price:
Protective stop :
Outlook
Price hit a low at 6405 last Thursday. A reversal Piercing Line candlestick pattern was formed on Friday, which was confirmed by a bullish candlestick followed through yesterday. There is also divergence warning given from the MACD, hinting at a possible price rebound. We could see the index testing 50EMA at 6640, which is also the Fibonacci 50% retracement point. Stochastic is at the oversold region and could turn up soon. MACD is still bearish at the moment.
Trading Idea
Wait for better trading idea.
