Market News
- All three major U.S. stock indexes turned sharply lower late in the day as Wednesday’s Consumer Prices report from the Labour Department drew near, with big bank earnings looming later in the week. Dow Jones fell 192 points, S&P 500 lost 35 points and Nasdaq Composite declined 107 points.
- CPI report is expected to show inflation gathered heat in June, the so-called “core” CPI, which strips away volatile food and energy prices, is seen offering further confirmation that inflation has peaked, which could potentially convince Fed to ease on its policy tightening in autumn.
- Worries that overly aggressive moves by the Fed to reign in decades-high inflation could push the economy over the brink of recession were exacerbated by the steepest inversion of the 2 year and 10 year Treasury yields since at least March 2010, a potential signal of near-term risk and economic contraction.
Market Views
- Asian stocks rose on Wednesday morning amid concerns about the economic outlook ahead of U.S. inflation data which might show inflation hit a fresh four-decade high. Hang Seng index advanced 167 points and Nikkei 225 index gained 86 points.
- The International Monetary Fund cut its growth forecasts for the U.S. economy and warned that a broad-based surge in inflation poses “systemic risks” to both the country and the global economy.
Dow Jones Index
(CFD Symbol: US30)
Trend:
Recommendation:
Last: 31,057
Target price:
Protective stop:
Outlook
The price correction appears to rebound from the Fibonacci 62% correction point of 5-8 July’s price swing. As long as price can stay above 30,795, there is chance for this index moving higher to 32,225. MACD is bullish but Stochastic just has a bearish crossover that hints at the correction.
Trading Idea
Buy 31,050 for 32,220 with a stop below 30,750.
Hang Seng Index
(CFD Symbol: HK50)
Trend:
Recommendation:
Last: 20,995
Target price:
Protective stop:
Outlook
Price is currently sitting at its resistance-turned-support zone after declining since 29 June. A bullish candle is in the formation and if price can close with a firm bullish candle, we see price rebounding to the 20EMA at 21,420. Stochastic is falling now and MACD has turned bearish.
Trading Idea.
Wait for better trading idea.
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend:
Recommendation: Short @ 11,900
Last: 11,779
Target price: 11,150
Protective stop: 12,260
Outlook
Price was capped by its previous price high resistance. It moved below the 20EMA support and if price further violates 11,621, we see price moving lower to 11,317. Conversely, if price can rebound tonight, we see price testing its previous price high resistance again.
Trading Idea
Sell 11,900 with a stop above 12,260 for 11,150. Entry order was filled on 7 July.
S&P 500 Index
(CFD Symbol: US500)
Trend:
Recommendation:
Last: 3827
Target price:
Protective stop:
Outlook
Price could be consolidating within a triangle pattern. It is on its way to the lower boundary of the triangle support and we could see price rebounding from that support at 3773 again. Stochastic is turning down but MACD has turned bullish.
Trading Idea
Wait for better trading idea.
