Market News
- U.S. stocks sold off sharply on Thursday as investor anxiety heightened ahead of data on Friday that is expected to show consumer prices remained elevated in May. Dow Jones slid 638 points, S&P 500 was down 97 points and Nasdaq Composite lost 332 points.
- The data is expected to show that consumer prices rose 0.7% in May, while the core consumer price index (CPI), which excludes the volatile food and energy sectors, rose 0.5% in the month.
- Market sentiment in China has been soured by renewed restrictions in Beijing and Shanghai as new COVID-19 cases have emerged. Multiple districts in Beijing are shutting down entertainment venues, while most citizens in Shanghai are facing new rounds of mass testing to prevent a new outbreak.
Market Views
- Asian shares followed Wall Street lower on Friday morning, while the dollar held on to its overnight gains, after rate hike guidance from the European Central Bank and upcoming U.S. inflation data unnerved investors. Hang Seng index fell 131 points and Nikkei 225 index declined 432 points.
- While the ECB decision was widely expected, the possibility of a larger rise in September weighed on sentiment. The euro zone economy is grappling with slowing growth and soaring inflation exacerbated by a months-long Ukraine war.
Dow Jones Index
(CFD Symbol: US30)
Trend:
Recommendation: Long @ 32,670
Last: 32,310
Target price: 33,650
Protective stop: 32,150
Outlook
This index has violated both the triangle pattern and the 20EMA. The 20EMA is declining, hinting at the bearish price trend. Both MACD and Stochastic are declining as well. We are likely to see further price decline to 31,720.
Trading Idea
Buy 32,670 for 33,650 with a stop below 32,150. Entry order was filled on 7 June.
Hang Seng Index
(CFD Symbol: HK50)
Trend:
Recommendation:
Last: 21,795
Target price:
Protective stop:
Outlook
Price corrected after trading near to its overhead resistance zone. Stochastic is at the overbought region but MACD remains bullish. We could see a retracement to the 20EMA at 21,040 first.
Trading Idea.
Wait for better trading idea
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend:
Recommendation: Long @ 12,400
Last: 12,307
Target price:13,500
Protective stop:12,100
Outlook
This index broke and closed below the 20EMA support, hinting at further price decline towards 12,040 ahead. Stochastic is falling and MACD has turned bearish with a bearish crossover seen.
Trading Idea
Buy 12,400 for 13,500 with a stop below 12,100. Entry order was filled on 9 June.
S&P 500 Index
(CFD Symbol: US500)
Trend:
Recommendation:
Last: 4024
Target price:
Protective stop:
Outlook
Price violated the 20EMA support and the resistance-turned-support level with a bearish candle. The 20EMA is falling, confirming the bearish trend. Stochastic is falling and MACD is bearish. We could see further price decline to 3960
Trading Idea
Wait for better trading idea
