CFD Indices – Stalling Economy Send US Indices Lower

Market News

  • S&P 500 ended lower on Thursday after a rise in weekly jobless claims compounded worries about a stalling economic recovery and fading hopes for more fiscal aid before the election. Dow Jones closed 19 points lower while Nasdaq Composite lost 54 points.
  • The number of Americans filing new claims for jobless benefits rose to a two-month high last week, stoking fears the COVID-19 pandemic was inflicting lasting damage to the labour market. A separate report showed manufacturing activity in New York State fell more than expected in October.
  • U.S. President Donald Trump said he is willing to raise his offer of $1.8 trillion for a COVID-19 relief deal with Democrats in Congress, but the idea was shot down by his fellow Republican, Senate Majority Leader Mitch McConnell.

Market Views

  • Asian stocks edged higher on Friday morning, buoyed by gains in China, but the mood was cautious due to a resurgence of coronavirus infections in Europe and the United States. Hang Seng index gained 208 points while Nikkei 225 index closed 16 points higher.
  • Many European countries have resumed lockdowns, and London will enter a tighter COVID-19 lockdown from midnight on Friday as Prime Minister Boris Johnson seeks to tackle a swiftly accelerating second coronavirus wave.

Dow Jones Index
(CFD Symbol: US30)
Trend :
Recommendation :
Last : 28,496
Target price:
Protective stop:

This index could be moving within a rising channel that was formed since Jun 20. It closed with a Bearish Harami candlestick pattern on Tuesday, and we have seen a price correction that brought price lower to the 20EMA. A long-legged Hammer candlestick was formed last night, hinting at potential rebound if price can stay above 20EMA at 28,170. Stochastic is falling at the moment, but is still strong at the overbought region. MACD has turned bullish.

Trading Idea
Wait for pullback to get into a long position.

Hang Seng Index
(CFD Symbol: HK50)
Trend :
Recommendation : Long
Last : 24,281
Target price: 24,850
Protective stop: 24,510 triggered

Price was resisted at the Fibonacci 62% correction point of the Aug-Sept’s decline. It is now sitting at the 20EMA support at 24,180, and if price can stay above 20EMA, there is chance for this index to move higher again. A violation of the 20EMA would hint for deeper correction towards 23,640. Stochastic is rising now. MACD has turned bearish.

Trading Idea
Buy 24,200 for 24,850 with a stop below 23,920. Order was filled on 9 Oct. Raise stop higher to 24,510 on14 Oct. Stop triggered on 15 Oct

Nasdaq 100 Index
(CFD Symbol: USTec)
Trend :
Recommendation :
Last : 11,865
Target price :
Protective stop:

Price is undergoing a pullback after penetrating the Fibonacci 62% correction point of the Sept’s decline, which is also the gap resistance zone. A Flag pattern could be in the process of formation, and there is a support zone at 11,610-11,650. Look for a Flag breakout for price to resume its upward momentum towards 12,467. Stochastic is falling but still strong at the overbought region. MACD has turned bullish.

Trading Idea
Buy 11,650 for 12,000 with a stop below 11,450.

S&P 500 Index
(CFD Symbol: US500)
Last: 3483
Target price: 3550
Protective stop: 3470 triggered

Price has been moving higher after breaking above the declining trendline and the 20EMA. The 20EMA is rising at the moment, showing the bullish trend now. As long as price stays above the 20EMA at 3426, we are likely to see price moving higher towards 3588. Stochastic is falling but is still at the overbought region. MACD has turned bullish.

Trading Idea
Buy 3500 for 3550 with a stop below 3470. Stop was triggered on 15 Oct.

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