CFD Indices – Rising Yields Sent Indices Lower

Market News

  • Wall Street ended sharply lower on Thursday, confirming the Nasdaq is in a correction after falling down nearly 10% from its February record. Dow Jones slid 1.1% last night while S&P 500 slipped 1.3% after remarks from Fed Chair Jerome Powell disappointed investors worried about rising longer-term U.S. bond yields.
  • The benchmark 10-year Treasury yield spiked to 1.533% after Powell’s comments, which did not point to changes in the Fed’s asset purchases to tackle the recent jump in yields whereby some investors had expected the Fed might step up purchases of long-term bonds, helping push down long-term interest rates.
  • China on Friday set a modest annual economic growth target, at above 6%, and pledged to create more jobs in cities than last year, as the world’s second-biggest economy emerged from a year disrupted by the effects of COVID-19.

Market Views

  • Asia Pacific stocks skidded on Friday morning as rising U.S. Treasury yields again rattled equity investors while hoisting the dollar to a three-month high, which in turn dragged the Japanese yen to an eight-month trough. Hang Seng index slid 275 points and Nikkei 225 index plummeted 571 points.
  • Oil prices rose early on Friday, adding to big gains overnight after OPEC and its allies agreed to not increase supply in April as they await a more solid recovery in demand from the coronavirus pandemic.

Dow Jones Index
(CFD Symbol: US30)
Trend :
Recommendation : Long @ 31,300
Last : 30,834
Target price: 32,000
Protective stop: 30,950 Triggered

Price violated the low that formed in 26 Feb and is now sitting at the last Fibonacci 62% correction point of Feb 21’s rally that lies at 30,570. Once this support is further broken, we could see price falling towards the previous low at 26,660. The 20EMA is falling now, suggesting the bearish price trend now.  Stochastic could be turning up. MACD is still bullish.

Trading Idea
Buy 31,300 for 32,000 with a stop at 30,950. Entry and stop were filled on 4 Mar.

Hang Seng Index
(CFD Symbol: HK50)
Trend :
Recommendation : Short @ 29,550
Last : 29,025
Target price: 28,900 Filled
Protective stop: 29,870

Price violated both the rising trendline support that formed since Dec 2021 and the 20EMA support last Friday. It has to hold above these resistances in order to move higher again, else we could see price moving lower towards 28,000. Stochastic is falling now. MACD is still bullish but there is a bearish crossover.

Trading Idea
Sell 29,550 for 28,900 with a stop at 29,870. Entry order was triggered on 2 Mar. Profit order was filled on 4 Mar.

Nasdaq 100 Index
(CFD Symbol: USTEC)
Trend :
Recommendation :
Last : 12,401
Target price :
Protective stop:

Price was resisted by both the price resistance and the falling 20EMA that hint for the bearish price trend now. It broke below the support price zone at 12,730, which is also the neckline of the potential Head and Shoulder reversal chart pattern. Price could retest the neckline again and if it unable to breakthrough, we could see price heading lower towards 12,030. Stochastic is near to the oversold region but MACD has turned bearish.

Trading Idea
Sell 12,670 for 12,100 with a stop above 13,110

S&P 500 Index
(CFD Symbol: US500)
Last: 3755
Target price:
Protective stop:

This index broke below the rising trendline that formed since Mar 2020 last night with a bearish candlestick. The 20EMA is falling now, suggesting a bearish price trend now. If price further breaks below 3664 it is likely to move lower towards 3480. Stochastic could be turning up. MACD is still bullish but the slow line is approaching to the zero line.

Trading Idea
Wait for better trading idea

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