CFD Indices – US Indices Futures Recovered on Trump’s COVID-19 Recovery

Market News

  • U.S. stocks closed lower on Friday as news that U.S. President Donald Trump tested positive for COVID-19 put investors in a risk-off mood and added to mounting uncertainties surrounding the looming election. Dow Jones fell 134 points; S&P 500 slid 32 points while Nasdaq lost the most among the three indexes, plunging 2.22%.
  • Trump tweeted late Thursday that he had contracted the coronavirus and would be placed under quarantine, compounding the unknowns for an already volatile market. Markets may have been somewhat soothed by news that Trump’s opponent, former Vice president Joe Biden, tested negative for the virus after the two men met for their first debate on Tuesday night.
  • Data released on Friday showed the recovery of the labour market could be losing steam. The U.S. economy added 661,000 jobs in September, fewer than expected and the slowest increase since the recovery began in May.

Market Views

  • Stock markets rose on Monday morning on hopes that President Trump could be discharged from hospital later in the day, easing some of the political uncertainty that shook global bourses in the previous session. Hang Seng index gained 378 points and Nikkei 225 index rose 310 points.
  • Doctors treating Trump say they are pleased with his progress. Relief about his health could fuel a rally in equities and other risky assets as investors prepare for the run-up to next month’s U.S. presidential election.

Dow Jones Index
(CFD Symbol: US30)
Trend :
Recommendation : Long
Last : 27,905
Target price: 27,950
Protective stop: 27,000

This index managed to close above the 20EMA for the three consecutive days, validating the 20EMA breakout. There is a long shadow Hammer candlestick pattern formed last Friday, showing the price rejection at this level whereby market failed to push price lower. We could expect more upside at the previous high at 28,207 if it penetrates above 28,080. Stochastic is rising at the moment. MACD is still bearish but there is a bullish crossover.

Trading Idea
Buy 27,250 for 27,950 with a stop below 27,000. Order was filled on 2 Oct.

Hang Seng Index
(CFD Symbol: HK50)
Trend :
Recommendation :
Last : 23,758
Target price:
Protective stop:

Price nearly hit the 20EMA resistance at 24,030 as expected after rebounding from the Fibonacci 161% price projection level that coincides with the gap zone that was created on 1st June. The next strong resistance lies at the support-turned-resistance zone at 24,246. Stochastic is turning up from the oversold region. MACD has turned bearish but a bullish crossover could be likely, hinting at the potential rebound ahead.

Trading Idea
Wait for better trading idea

Nasdaq 100 Index
(CFD Symbol: USTec)
Trend :
Recommendation : Long
Last : 11,372
Target price : 11,800
Protective stop: 11,100

The price rebound was resisted at the Fibonacci 50% correction point of the Sept’s decline. A Bearish Engulfing reversal candle was seen last Friday, which could hint that a decline could follow thereafter. Price is likely to test the Double Bottom low of 10,675 if it breaks below the 20EMA at 11,290. Stochastic could be turning down. MACD has turned bearish but there is a bullish crossover.

Trading Idea
Buy 11,350 for 11,800 with a stop below 11,100. Order was filled on 2 Oct.

S&P 500 Index
(CFD Symbol: US500)
Recommendation: Long
Last: 3375
Target price: 3400
Protective stop: 3290

Price managed to close above the declining trendline and the 20EMA support for two consecutive nights. Let’s watch out for the price reaction tonight as we would like to see three consecutive closes to confirm the trendline breakout. If the breakout is validated, we could target for 3442. Stochastic is rising now. MACD has turned bearish at the moment but there is a bullish crossover

Trading Idea
Buy 3315 for 3400 with a stop below 3290. Order was filled on 2 Oct.

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