Market News
- S&P 500 and Nasdaq closed weaker on Tuesday, the first day of seasonally slow August, ahead of U.S. jobs data and major companies’ earnings reports later this week. Dow Jones rose 71 points, briefly touching its highest level this year.
- U.S. second-quarter earnings are now expected to fall 5.9% from a year earlier, Refinitiv data on Tuesday showed, compared with a 7.9% decline estimated a week earlier.
- New Zealand’s unemployment rate rose to 3.6% in the second quarter, up from the 3.4% in the first quarter and higher than the 3.5% expected in a Reuters poll, and job growth climbed 1% quarter on quarter, sharply higher than Reuters forecast of 0.5%.
Market Views
- Asian stocks fell on Wednesday morning, with technology shares seeing a heavy dose of profit-taking after an unexpected downgrade to the U.S. sovereign rating by Fitch somewhat dented sentiment. Hang Seng index slumped 397 points and Nikkei 225 index plunged 759 points.
- Most analysts said the downgrade will have a limited direct impact on financial markets, they noted the possibility of some near-term risk aversion on the news. Fitch is the second ratings agency to strip the U.S. of its AAA rating after Standards and Poor.
Dow Jones Index
(CFD Symbol: US30)
Trend:
Recommendation: Short @ 35,480
Last: 35,514
Target price: 34,820
Protective stop: 35,700
Outlook
This index could have formed a potential double top chart pattern. Price is heading towards its previous low support level at 35,188. We would like to see price violating 35,888 for a confirmation of the double top pattern. Stochastic is at the overbought zone and there is a bearish MACD crossover.
Trading Idea
Sell 35,480 for 34,820 with a stop above 35,700. Entry was filled on 28 July.
Hang Seng Index
(CFD Symbol: HK50)
Trend:
Recommendation:
Last: 19,560
Target price:
Protective stop:
Outlook
This index tested its previous price top for a second occasion yesterday. A bearish engulfing candlestick pattern was formed, hinting that price could fall to 18,190. Stochastic is falling from the overbought zone and a bearish MACD crossover is likely.
Trading Idea
Wait for better trading idea
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend:
Recommendation:
Last: 15,615
Target price:
Protective stop:
Outlook
Price could be consolidating within a triangle pattern. It is still trading above the rising 20EMA support. We could see price moving lower to its triangle lower boundary at 15,390 in the next couple of days. A directional movement will be followed once the triangle is broken.
Trading Idea
Wait for better trading idea
FTSE 100 Index
(CFD Symbol: UK100)
Trend:
Recommendation: Short @ 7675
Last: 7624
Target price: 7540
Protective stop: 7680 triggered
Outlook
Price broke and closed below a flag pattern after being capped by a declining trendline. We are likely to see price testing the first 20EMA support at 7573. Stochastic is falling and there is a bearish MACD crossover.
Trading Idea
Sell 7675 for 7540 with a stop above 7680. Entry was filled on 26 July. Stop was filled on 26 July.
