Market News
- Wall Street’s main stock indexes closed sharply lower on Tuesday after stronger-than-expected retail sales data stoked worries interest rates could stay higher for longer, while U.S. big banks dropped on a report that Fitch could downgrade some lenders.
- Banks saw the brunt of the selling as investors grew more anxious about interest rates. The U.S. Treasury yield curve has been inverted for over a year, with longer-term bonds yielding less than short-term debt instruments. This persistent situation pressures profits that banks can earn on loans.
- Rather than slowing into recession, the U.S. economy is actually gaining significant steam in the third quarter, according to the latest projections from the Atlanta Federal Reserve.
Market Views
- Asia-Pacific markets fell on Wednesday morning, mirroring moves on Wall Street after a decline in U.S. banks. Hang Seng index slipped 248 points and Nikkei 225 index dropped 333 points.
- Business sentiment among large Japanese businesses ticked up in July, according to the Reuters Tankan survey. The index for the manufacturing sector climbed to +12 up from +3 in June, while the non-manufacturing index showed a reading of +32, up from +23 in the previous month.
Dow Jones Index
(CFD Symbol: US30)
Trend:
Recommendation: Short @ 35,480
Last: 34,956
Target price: 34,820
Protective stop: 35,140
Outlook
This index is still trading in a sideway consolidation pattern. It tested the lower boundary and could rebound to test its upper boundary again. Stochastic is near to the oversold region and MACD remains bullish.
Trading Idea
Sell 35,480 for 34,820 with a stop above 35,700. Entry was filled on 28 July. Shift stop lower to 35,140.
Hang Seng Index
(CFD Symbol: HK50)
Trend:
Recommendation:
Last: 18,340
Target price:
Protective stop:
Outlook
Price tested its previous low support zone yesterday. We could see price rebounding from this support zone and to test the 20EMA at 19,000. Stochastic is at the oversold zone and MACD is bearish.
Trading Idea
Wait for better trading idea
Nasdaq 100 Index
(CFD Symbol: USTec)
Trend:
Recommendation:
Last: 15,060
Target price:
Protective stop:
Outlook
Price was capped by its falling 20EMA resistance point. It has to penetrate and close above the 20EMA for more upside. A violation of its recent low at 14,950 will bring price lower to 14,480. Stochastic is at the oversold zone and MACD remains bearish.
Trading Idea
Wait for better trading idea
FTSE 100 Index
(CFD Symbol: UK100)
Trend:
Recommendation: Long @ 7486
Last: 7375
Target price: 7670
Protective stop: 7560 filled
Outlook
Price broke down a flag continuation pattern on 11 August. We are likely to see price continuing its downward momentum to 7250. Stochastic is moving lower to its oversold zone. MACD remains bearish and is moving lower.
Trading Idea
Buy 7486 for 7670 with a stop below 7415. Entry was filled on 4 August. Shift stop higher to 7560 to protect profit. Stop was filled on 11 August.
