CFD Indices – Market Eyeing US Stimulus’s Progress

Market News

  • S&P 500 and Nasdaq closed modestly higher on Friday in choppy trading, with investors keeping a close eye on negotiations on a U.S. stimulus package that would ease the economic shock caused by the coronavirus pandemic, while the Dow closed slightly lower on the day, moving within tight ranges.
  • U.S. House Speaker Nancy Pelosi said it still was possible to get another round of COVID-19 aid before the Nov. 3 election, but that it was up to President Donald Trump to act, including talking to reluctant Senate Republicans, if he wants it.
  • Trump and Democratic rival Joe Biden debated on Thursday for the last time to persuade the few remaining undecided voters 11 days before their contest, but while the debate was more toned down and substantive, it hardly moved the needle.

Market Views

  • Asian shares were mixed on Monday morning as surging coronavirus cases in Europe and the U.S. threatened the global outlook, while China’s leaders meet to ponder the future of the economic giant. Hang Seng index rose 132 points while Nikkei 225 index slid 32 points.
  • A packed week for monetary policy sees three major central banks hold meetings. The Bank of Canada and Bank of Japan are expected to hold fire for now, while the market assumes the European Central Bank will sound cautious on inflation and growth even if they skip a further easing.

Dow Jones Index
(CFD Symbol: US30)
Trend :
Recommendation : Long
Last : 28,120
Target price: 28,680
Protective stop: 27,980

This index could be moving within a rising channel that was formed since Jun 20. Price has violated the 20EMA with a falling window. If price closes below the 20EMA tonight, we are likely to see price moving lower towards the lower boundary of the rising channel. It has to stay above the 20EMA to move higher. Stochastic is moving lower at the moment. MACD is bullish now.

Trading Idea
Buy 28,230 for 28,680 with a stop below 27,980. Buy order was filled on 26 Oct.

Hang Seng Index
(CFD Symbol: HK50)
Trend :
Recommendation : Long
Last : 24,950
Target price: 25,250
Protective stop: 24,530

Price rebounded from the resistance-turned-support zone with a Harami candlestick pattern last Friday. The 20EMA is rising and is moving higher, hinting of a bullish trend ahead. It is now penetrating the overhead Fibonacci 62% correction point of the Aug-Sept’s decline. If price can hold above 24,767, we are likely to see price moving higher. Stochastic is rising and is at the overbought zone. MACD has turned bullish.

Trading Idea
Buy 24,800 for 25,250 with a stop below 24,530. Buy order was filled on 22 Oct.

Nasdaq 100 Index
(CFD Symbol: USTec)
Trend :
Recommendation : Long
Last : 11,625
Target price : 12,000
Protective stop: 11,450

Price has been correcting and is now hovering around the 20EMA support, which coincides with the Fibonacci 38% correction point of Sep-Oct’s rally. This support is also the gap resistance-turned-support zone. Look for price to resume its upward momentum towards 12,467 if this index can hold above the 20EMA. Stochastic could be turning up again. MACD has turned bullish

Trading Idea
Buy 11,650 for 12,000 with a stop below 11,450. Order was filled on 19 Oct.

S&P 500 Index
(CFD Symbol: US500)
Last: 3438
Target price:
Protective stop:

Price is now hovering around the 20EMA, which is acting as support at the moment. The 20EMA is also coinciding with the Fibonacci 38% correction point of Sep-Oct 20’s rally. As long as price stays above the 20EMA at 3435, we are likely to see price moving higher towards 3588. Stochastic is falling now. MACD has turned bullish.

Trading Idea
Buy 3420 for 3495 with a stop below 3395

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