- S&P 500 closed lower on Tuesday while the Nasdaq edged up to another record high, boosted by Apple and Netflix, as investors balanced worries about the slowing pace of economic recovery with expectations that the Fed will maintain its accommodative monetary policy.
- The possibility of a slowdown in the economic recovery from COVID-19 and central banks, such as the U.S. Federal Reserve and the European Central Bank (ECB), beginning asset tapering at some point, is leading to investor wariness in some corners. However, some investors remained cautiously optimistic.
- ECB will hand down its policy decision on Thursday. Across the Atlantic, U.S. President Joe Biden is due to decide whether to re-nominate Fed Chair Jerome Powell to a second term within the week, while Dallas Fed President Robert Kaplan is due to speak later in the day.
- Asian shares were higher on Wednesday morning, as a more risk-averse mood spread into the market from U.S. overnight due to worries about slowing growth that hurt equities while helping the dollar firm. Hang Seng index was up 40 points and Nikkei 225 index rose 245 points.
- Investors continued their exit from China Evergrande Group after a further cut in the company’s bond and stock ratings. Chinese technology shares listed in the U.S climbed as the view that China’s recent regulatory tightening has somewhat passed prevailed.
Dow Jones Index
(CFD Symbol: US30)
Recommendation : Long @ 35,300
Last : 35,080
Target price: 35,60
Protective stop: 35,180 Triggered
Price broke and closed below both the 20EMA support and the rising trendline after being resisted by the price resistance zone of 35,500. The 20EMA is now turning bearish, and we are likely to see a correction towards its previous low at 34,560. Stochastic is falling now. MACD remains bullish but had a bearish crossover.
Buy 35,300 for 35,600 with a stop below 34,950. Entry order was filled on 2 Sep. Raise stop to 35,180 on 3 Sep. Stop was triggered on 7 Sep.
Hang Seng Index
(CFD Symbol: HK50)
Last : 26,214
Price has been moving higher after forming a Double Bottom chart pattern. It has moved above the 20EMA, but is approaching its key resistance of 26,890. This index has to penetrate above this resistance for more upside ahead. Else, a pullback could follow. Stochastic is rising now. MACD has turned bullish.
Sell 26,800 for 25,900 with a stop above 27,200.
Nasdaq 100 Index
(CFD Symbol: USTEC)
Last : 15,669
Target price :
This index has been moving within a rising channel since Sep 2020. It broke out from a Triangle pattern on 23 Aug and tested the upper boundary of the channel since 30 Aug. If price cannot move above the upper channel boundary, we could see a pullback towards 20EMA at 15,420. Stochastic is at the overbought region. MACD is still bullish.
Wait for better trading idea
S&P 500 Index
(CFD Symbol: US500)
Price has been stalling at the all-time high resistance of 4550. The price action shows that this index could be losing its upward momentum, as price formed small candles. It could be testing the 20EMA at 4490 and a violation of the 20EMA could hint for deeper correction towards the lower boundary of channel support at 4450. Stochastic is falling now. MACD remains bullish.
Buy 4495 for 4550 with a stop below 4465.