CFD Indices – Drop In Retail Sales Halted Wall Street Rally.

Market News

  • Wall Street’s main indexes slid on Tuesday, with the S&P 500 logging its biggest one-day percentage fall in about a month, weighed down by a drop in U.S. retail sales that raised concerns about the economic recovery, as well as by disappointing results from Home Depot.
  • A report showed that U.S. retail sales fell more than expected in July, as supply shortages depressed motor vehicle purchases and the boost to spending from the economy’s reopening and stimulus checks faded, suggesting a slowdown in growth early in the third quarter.
  • Investors are looking for signs about when the Fed will rein in its easy money policies, with minutes from the central bank’s latest meeting due on Wednesday, and are watching the resurgence in COVID-19 cases and its impact on the economy.

Market Views

  • Asia Pacific stocks were up on Wednesday morning but took a pause as the continuous spread of COVID-19 globally makes concerns over its impact on the economic recovery hard to shake off. Hang Seng index rose 196 points and Nikkei 225 index gained 155 points.
  • The Reserve Bank of New Zealand left its interest rate at0.25% against the forecast raise to 0.5% as it handed down its policy decision earlier in the day. The country entered a lockdown after reporting its first COVID-19 community transmission since February 2020.

Dow Jones Index
(CFD Symbol: US30)
Trend :
Recommendation : Long @ 35,150
Last : 35,333
Target price: 35,600
Protective stop: 34,900

Outlook
Price managed to stay above the resistance-turned-support zone, which is also near to the 20EMA support at 35,160. As long as price can stay above this zone, there is chance for price moving higher. A failure moves to sustain above this level will likely to see a price decline. Stochastic is at the overbought region now. MACD remains bullish.

Trading Idea
Buy 35,150 for 35,600 with a stop below 34.900. Entry order was filled on 17 August

Hang Seng Index
(CFD Symbol: HK50)
Trend :
Recommendation :
Last : 25,899
Target price:
Protective stop:

Outlook
Price could not break through the 20EMA resistance, which is also the support-turned-resistance zone as well as the gap resistance. Thus, a price decline is followed-through. As long as price didn’t violate its previous low, there is chance for price moving higher again. Stochastic is falling now. MACD is bearish despite having a bullish crossover.

Trading Idea
Sell 26,600 with a stop above 27,050 for 25,500.

Nasdaq 100 Index
(CFD Symbol: USTEC)
Trend :
Recommendation :
Last : 15,021
Target price :
Protective stop:

Outlook
Price has been stalling and it could be forming potential Double Top chart pattern. It slightly violated the rising channel, but the 20EMA is acting as support at 15,000. Watch out for the key 20EMA support. If price can sustain above the 20EMA, there is chance for this index moving higher again. Stochastic is still at the overbought region now. MACD is still bullish but has given divergence warning.

Trading Idea
Wait for better trading ideas.

S&P 500 Index
(CFD Symbol: US500)
Trend:
Recommendation:
Last: 4451
Target price:
Protective stop:

Outlook
A new high at 4481 was created on 16 Aug. Price has been moving along with the rising 20EMA which is acting as support at 4422. Stochastic is at the overbought region now. MACD remains bullish but has given divergence warning.

Trading Idea
Buy 4420 for 4480 with a stop below 4385

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