- Last night, Dow Jones and S&P 500 fell 0.6% and 0.2% respectively with financials and other groups closely tied to economic growth leading declines, while the Nasdaq Composite edged higher to another closing record.
- The S&P 500 banks index fell 2.5% as U.S. Treasuries rallied, with the 10-year yield hitting its lowest since Feb. 24. Data showed U.S. services industry activity grew at a moderate pace in June, likely restrained by labour and raw material shortages.
- The benchmark 10-year U.S. Treasury yields hit February lows after data released on Tuesday said the U.S. Institute of Supply Management (ISM) non-manufacturing purchasing managers index (PMI) in June was 60.1, below the 63.5 figure in forecasts.
- Asia Pacific markets stumbled on Wednesday morning as a bout of risk aversion boosted bonds and the dollar, while investors braced for minutes from the Fed’s last meeting which should underline a hawkish turn in U.S. monetary policy. Hang Seng index fell 211 points and Nikkei 225 index slid 245 points.
- Oil prices had shed some recent gains after OPEC producers cancelled a meeting when major players were unable to come to an agreement to increase supply. Analysts at NatWest Markets said the absence of a deal on expanding output was a positive for prices in the near term, but could be a liability over time.
Dow Jones Index
(CFD Symbol: US30)
Last : 34,551
This index hit the resistance zone for the third times last Friday, but was unable to penetrate above this resistance zone, leading to a price correction last night. The 20EMA is now acting as support at 34,390. A further violation of the 20EMA would hint for deeper correction. Price has to breakthrough the resistance zone for more upside ahead. Stochastic is in the overbought region. MACD has turned bullish.
Buy 34,400 for 34,880 with a stop below 34,100.
Hang Seng Index
(CFD Symbol: HK50)
Recommendation : Long @ 27,850
Last : 27,841
Target price: 28,700
Protective stop: 27,400
This index remains in a sideways trend as it is still moving within a rectangle consolidation zone that ranged from 27,500 to 29,570. It is now trading near to its lower end of the consolidation zone. Look out for bullish reversal candlestick pattern to spot the bottom as Stochastic is near to the oversold region. MACD has turned bearish and there is a bearish crossover.
Buy 27,850 for 28,700 with a stop below 27,400. Entry order was filled on 7 July
Nasdaq 100 Index
(CFD Symbol: USTEC)
Last : 14,796
Target price :
Price reached a high at 14,795 last night. The next resistance lies at Fibonacci 200% projection level at 15,200. The 20EMA is rising and is acting as support at 14,380. Stochastic is currently in the overbought region. MACD is still bullish but has been given divergence warning.
Wait for better trading idea.
S&P 500 Index
(CFD Symbol: US500)
Price broke out from the Triangle chart pattern on 25 June. It is a bullish sign and we are seeing price moving higher. It is now near to the first resistance at 4347. A correction is likely to follow towards the 20EMA at 4282 if price cannot further penetrate its high at 4356. Stochastic is in the overbought region now. MACD remains bullish.
Buy 4285 for 4345 with a stop below 4245.