CFD Indices – Increasing COVID-19 Cases Sent US Indices Lower

Market News

  • U.S. stocks retreated from record closing highs on Tuesday, ending lower as surging COVID-19 cases and the growing threat of a fresh round of economic lockdowns. The sell-off was a reversal of Monday’s rally, in which the blue-chip Dow reached its first record closing high since before the pandemic.
  • A skittish mood also swept investors as several U.S. states began restricting gatherings and mandating face-coverings after more than 70,000 Americans were hospitalized for treatment of COVID-19 as of Monday. It’s going to be the vaccine versus the virus, flip-flopping back and forth until we get to the point where the vaccine is rolled out, said by the chief investment officer at NovaPoint in Atlanta.
  • The weak retail sales data dampened the euphoria caused by potential vaccine breakthroughs as the retail sales report released by the Commerce Department showed spending decelerating as the holiday shopping season approaches amid a lack of forthcoming fiscal relief from Washington.

Market Views

  • Asia Pacific shares stepped back on Wednesday morning as soft U.S. retail sales fuelled worries that rising coronavirus cases could stifle a still fragile economic recovery, dampening the euphoria from vaccine trial breakthroughs. Hang Seng index fell 27 points and Nikkei 225 index slid 197 points.
  • Fed Chair Jerome Powell said on Tuesday it was not time to shut down emergency programs aimed at battling the economic fallout from the coronavirus pandemic, with cases again surging and the economy left with “a long way to go” to recover.

Dow Jones Index
(CFD Symbol: US30)
Trend :
Recommendation : Long @ 29,200
Last : 29,736
Target price: 29,900 Filled
Protective stop: 28,830

Price managed to stay above the previous high resistance-turned-support zone since 9 Nov, keeping the uptrend intact. As long as it stays above this zone, there is chance for this index to move higher towards Fibonacci 161% projection level at 30,745 if it can surpass 30,090. The 20EMA is still rising at the moment. Stochastic is still strong and is moving higher. MACD is also bullish

Trading Idea
Buy 29,200 for 29,990 with a stop below 28,830. Order was filled on 12 Nov. Profit order was filled on 16 Nov.

Hang Seng Index
(CFD Symbol: HK50)
Trend :
Recommendation : Long @ 26,150
Last : 26,271
Target price: 26,750
Protective stop: 26,150

Price is still trading within a range of 25,890 to 26,870, which is where the gap support and the Jul 20’s resistance high lie. This index is likely to stay within this range until a breakout occurs. The support lies at the 20EMA at 25,680. Stochastic is still strong but at the overbought region. MACD is also strong and bullish now.

Trading Idea
Buy 26,150 for 26,750 with a stop below 25,930. Order was filled on 13 Nov. Shift stop to 26,150.

Nasdaq 100 Index
(CFD Symbol: USTec)
Trend :
Recommendation :
Last : 11,952
Target price :
Protective stop:

The recent rally of this index was halted by the Fibonacci 62% correction point of 9-10 Nov’s decline at 11,952. If price cannot break through 12,070, a possible pullback could be expected to retest 11,510 again.  Stochastic is relatively weak at the moment, and a bearish crossover could be likely. MACD is still bullish but there is a divergence warning that hint for potential top.

Trading Idea
Wait for better trading idea

S&P 500 Index
(CFD Symbol: US500)
Last: 3605
Target price:
Protective stop:

This index has been maintaining above the gap support that was created on 9 Nov, which is also near to the Fibonacci 38% correction point of Oct-Nov 20’s price swing. The 20EMA is still rising now, and is acting as another layer of support at 3507. We could see price moving higher towards the previous high of 3674. Stochastic could be moving lower but MACD is still bullish.

Trading Idea
Wait for better trading idea

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