- U.S. stocks ended sharply lower on Friday as investors weighed signs of higher inflation, while Apple tumbled following an unfavourable court ruling related to its app store. Its drop contributed more than any other stocks to the Nasdaq and S&P 500’s declines.
- U.S. producer prices rose solidly in August, leading to the biggest annual gain in nearly 11 years and indicating that high inflation was likely to persist as the pandemic pressures supply chains. Sentiment also took a hit from Cleveland Federal Reserve Bank President Loretta Mester’s comments that she would still like the central bank to begin tapering asset purchases this year despite the weak August jobs report.
- The three main U.S. indexes got some support early from news of a phone call between U.S. President Joe Biden and Chinese leader Xi Jinping that was taken as a positive sign, which could bring a thaw in ties between the world’s two most important trading partners.
- Asia Pacific stocks were mostly down on Monday morning, with investors calculating the risk of slower economic recovery from COVID-19 amid elevated inflation. Hang Seng index slumped 478 points and Nikkei 225 index fell 57 points.
- Authorities are reportedly seeking to break up Ant Group’s Alipay and create a separate app for its loan business. U.S.-China tension is also on the radar with U.S. President Joe Biden reportedly contemplating a new probe into Chinese subsidies.
Dow Jones Index
(CFD Symbol: US30)
Last : 34,684
Price has been moving lower after breaking below both the 20EMA support and the rising trendline. The 20EMA is now bearish, and is testing the previous low at 34,560. If price can’t rebound at this level, we are likely to see further price decline towards 33,730. Stochastic is falling now. MACD has turned bearish with the fast line below the zero line.
Wait for better trading idea
Hang Seng Index
(CFD Symbol: HK50)
Last : 25,683
Price was resisted near the key resistance zone of 26,890. This index has to penetrate above this resistance for more upside ahead. It is now testing the 20EMA and if price close below the 20EMA, we are likely to see price falling to its low at 24,753 again. Stochastic is falling now. MACD is at the zero line now.
Sell 26,800 for 25,900 with a stop above 27,200.
Nasdaq 100 Index
(CFD Symbol: USTEC)
Last : 15,450
Target price :
This index has been moving within a rising channel since Sep 2020. It has been correcting after being resisted by the upper boundary of the channel since 30 Aug. Price is now sitting at the 20EMA support at 15,430. If price could not rebound from this support, there is chance for this index continue its fall towards 15,180. Stochastic is falling now. MACD is still bullish.
Wait for better trading idea
S&P 500 Index
(CFD Symbol: US500)
Recommendation: Long @ 4495
Target price: 4550
Protective stop: 4465 triggered
Price has been retracing after being stalled at the all-time high resistance of 4550. It is now trading near the lower boundary of the channel support and this could be a good chance for long entry if price can form a bullish reversal candlestick pattern at the channel support. Stochastic is falling now. MACD remains bullish.
Buy 4495 for 4550 with a stop below 4465. Entry order was filled on 9 Sep. Stop was triggered on 13 Sep.