Market News
- The Dow Jones index rose more than 250 points, contributed by Chevron and Exxon Mobil which gained 0.8% and 0.7% respectively due to the boost in higher oil prices. S&P 500 index was up 18 points and Nasdaq Composite index closed 29 points higher.
- Sentiment remained low with U.S. yield curve inverting even further, exacerbating fears of an impending recession. The spread between the 10-year Treasury yield and the 2-year rate briefly fell to negative 6 basis points on Wednesday.
- However, MRB Partners strategist Prajakta Bhide thinks recessionary fears may be overblown as the yield curve’s inversion this year is a symptom of external growth stress and powerful distortions in global bond yields and does not reflect restrictive Fed policy. He said the odds of a recession in the next 12 months are no higher than 20%.
Market Views
- Asia Pacific stocks slipped in Thursday morning as the closely watched yield curve in U.S. Treasuries inverted further overnight, triggering recession fears. The Chinese Yuan also briefly weakened to a level not seen in more than 11.5 years. Nikkei 225 index fell 101 points while Hang Seng index plunged 97 points.
- The fears of China actively engaging in a currency war were abetted by the American Treasury’s declaration of China as a ‘currency manipulator,’ the recent weakening of Yuan looks more like a controlled easing of China monetary policy to offset downward pressure on growth, said analysts at J.P. Morgan.
Dow Jones Index
(CFD Symbol: US30)
Trend :
Recommendation :
Last : 25,959
Target price:
Protective stop:
Outlook
The index’s rebound was capped by the 50EMA and the mid-June low resistance level, marking the end of the corrective rally. A bearish long red candlestick followed after a spinning top candlestick formed on last Thursday, reinforcing the bearish trend but the index managed to stay above recent lows. Price is likely to move in sideway manner in between the 50EMA and support at 25,070. A move below 25,070 would target the previous low point at 24,603. Stochastic has turned down and MACD is still bearish at the moment.
Trading Idea
Wait for better trading idea
Hang Seng Index
(CFD Symbol: HK50)
Trend :
Recommendation :
Last : 25,535
Target price:
Protective stop:
Outlook
The declining 20EMA is acting as a resistance, capping price’s rebound and marking the end of the consolidation. Price tried to move above the consolidation resistance but recent attempts have failed. We expect the index to trend lower and test its previous low at 24,941 again as the steep slope of the 20EMA is hinting at a strong downtrend. A move below 24,941 could bring the index lower to 23,890. Stochastic has turned down and MACD is still bearish
Trading Idea
Wait for better trading idea.
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend :
Recommendation :
Last : 7554
Target price :
Protective stop:
Outlook
Price could not break above its previous high of 7780 and has declined lower to 7355. However, price has not been able to break below this low point. A previous attempt was also unsuccessful. Price is likely to move with the resistance at 7780 and support at 7355. Stochastic is turning down and MACD is still bearish at the moment but the slow line has been climbing higher. Momentum indicators are mixed at the moment.
Trading Idea
Wait for better trading idea
Nikkei 225 Index
(CFD Symbol: JP225)
Trend :
Recommendation :
Last : 20,418
Target price:
Protective stop :
Outlook
This index has been capped by its 20EMA resistance point. The 20EMA is declining at the moment, suggesting a downward movement ahead. Price is likely to range between 20EMA and the previous low point from 20,635 to 19,880. A move below 19,880 would target 19,350. Stochastic could be turning down soon. MACD is still bearish at the moment.
Trading Idea
Wait for better trading idea.
