- Wall Street continued to slide on Thursday, ending in the red as inflation hit a four-decade high, cementing expectations that U.S. Fed would hike key interest rates at the conclusion of next week’s monetary policy meeting to prevent the economy from overheating.
- Consumer prices surged in February to its hottest reading in forty years of 7.9% annual growth rate, according to the Labour Department. There will be more to come in the next or two months as some of the rising commodity prices get incorporated.
- Annual core CPI growth and other indicators diverge far away from Fed’s average annual inflation target as energy prices were the main culprit, with gasoline prices surging 6.6% in a single month, although the report did not reflect the entirety of spiking crude prices in the wake of Russia’s actions in Ukraine
- Asian markets extended a global slump on Friday morning after the fastest U.S. inflation in four decades and a hawkish European Central Bank (ECB) bolstered expectations for more aggressive rate hikes, hammering sentiment already stung by the Ukraine war. Hang Seng index slid 682 points and Nikkei 225 index dived 666 points
- The ECB said on Thursday it will stop bond-buying in the third quarter, opening the door for interest rate hikes as surging inflation outweighs worries about the hit to economic growth from Russia’s invasion of Ukraine
Dow Jones Index
(CFD Symbol: US30)
Recommendation: Long @32,710
Target price: 33,740
Protective stop: 32,540
This index retested its low and rebounded after forming a Bullish Engulfing candlestick pattern. Both Stochastic and MACD are giving divergence warning as well. As long as price stays above 32,550, we are likely see a rally towards its overhead 20EMA resistance at 33,740.
Buy 32,710 with a stop below 32,230 for 33,740. Entry order was filled on 8 Mar. Shift stop higher to 32,540 on 11 Mar.
Hang Seng Index
(CFD Symbol: HK50)
This index has been diving after violating the neckline of a Double Top chart pattern. The Double Top’s price target at 21,465 has been reached but there is no sign of recovery as yet. We are likely to see price further dip towards 19,625. Stochastic is at the oversold region and MACD remains bearish.
Wait for better trading idea.
Nasdaq 100 Index
(CFD Symbol: USTec)
This index remains bearish as it has been capped by the falling 20EMA which is acting as resistance currently. A possible price low has been formed at 13,032. Both Stochastic and MACD are giving potential divergence warning. We could see a technical rebound towards the 20EMA at 13,930.
Wait for better trading idea
S&P 500 Index
(CFD Symbol: US500)
Recommendation: Long @ 4180
Price rebounded after forming an inverted Hammer candlestick pattern. As long as price holds above the inverted Hammer’s low of 4141, we are likely to see price having a technical rebound towards the 20EMA at 4325.
Buy 4180 with a stop below 4106 for 4325. Entry order was filled on 8 Mar. Shift stop higher to 4150 on 11 Mar.