Tag: UK100

Market News

• Stocks on Wall Street closed mixed on Tuesday, pressured by worries about U.S. lawmakers opposed to a deal to raise the $31.4 trillion debt ceiling, but supported by another surge in Nvidia shares that briefly lifted the chipmaker into the rare club of companies valued at $1 trillion.

• On Tuesday, Republican House of Representatives Speaker McCarthy said the deal should be “easy” for Republicans to vote for and was likely to pass, but some right-wing Republicans said they opposed the bipartisan deal.

• Treasuries rallied after the initial deal was struck, on the expectation a U.S. default would be averted, but the market remains skittish as once authorised to borrow the Treasury is likely to issue lots of debt to replenish its coffers.

Market Views

• Asian markets slid toward a second month of losses in a row on Wednesday as weak Chinese factory activity fed growing doubts about the post-pandemic recovery in the world’s second biggest economy. Hang Seng index slumped 417 points and Nikkei 225 index dropped 435 points.

• Data showed Chinese manufacturing activity contracted faster than expected this month on weakening demand, with the official manufacturing purchasing managers’ index down to 48.2 against a forecast of 49.4.

Dow Jones Index
(CFD Symbol: US30)

Trend:

Recommendation:

Last: 32,921

Target price:

Protective stop:

Outlook
The short rebound came to an end after the rally was capped by the 20EMA resistance point. We are likely to see price testing its previous low at 32,562. Stochastic remains weak and MACD remains bearish with both lines are heading lower.

Trading Idea
Sell 33,180 for 32,500 with a stop above 33,400.

Hang Seng Index
(CFD Symbol: HK50)

Trend:

Recommendation:

Last: 18,159

Target price:

Protective stop:

Outlook
Price continued its decline after breaking down from a sideway consolidation zone. We are likely to see price falling to the Fibonacci 62% correction point at 17,700 in the next couple of days. Stochastic is weak and MACD remains bearish.

Trading Idea.
Wait for better trading idea.

Nasdaq 100 Index
(CFD Symbol: USTec)

Trend:

Recommendation: Short @ 13,960

Last: 14,336

Target price: 13,250

Protective stop: 14,000 Triggered

Outlook
Price could have reached a possible price top at 14,528. A Doji candlestick pattern was formed last night. We are likely to see price retracing to the 20EMA at 13,800. Stochastic is at the overbought zone. MACD remains bullish but a bearish crossover is likely.

Trading Idea
Sell 13,960 for 13,250 with a stop above 14,000. Entry and stop were triggered on 29 May.

FTSE 100 Index
(CFD Symbol: UK100)

Trend:

Recommendation:

Last: 7503

Target price:

Protective stop:

Outlook
Price continues its downward momentum after as it breaks below its recent price low of 7552. We are likely to see price diving to 7202. Stochastic is very weak and MACD remains bearish with both its lines moving lower.

Trading Idea
Wait for better trading idea.

Market News

• Wall Street ended sharply higher on Thursday after a blowout forecast from Nvidia sent the chipmaker’s stock soaring and fueled a rally in AI-related companies, while investors watched for signs of progress in U.S. debt ceiling talks.

• Nvidia Corp soared 24% to a record high close after the world’s most valuable chipmaker forecast quarterly revenue 50% higher than estimates and said it was ramping up supply to meet demand for its artificial-intelligence (AI) chips.

• U.S. President Joe Biden and Republican lawmaker Kevin McCarthy on Thursday were edging close to a deal, with the parties just $70 billion apart on discretionary spending, Reuters reported, citing a source familiar with the talks.

Market Views

• Asia stocks were mixed on Friday, apart from standout gains in Japan, as an artificial intelligence rally took a breather and as time ticked out on high-stakes talks to avoid a U.S. debt default. Hang Seng index fell 369 points while Nikkei 225 index gained 190 points.

• May data on Friday showed inflation slowing to 3.3% in Tokyo, a decent proxy for the nation, which means it’s been comfortably above the Bank of Japan’s 2% target for a year now.

Dow Jones Index
(CFD Symbol: US30)

Trend:

Recommendation:

Last: 32,720

Target price:

Protective stop:

Outlook
Price is currently sitting at its resistance-turned-support zone. A potential Doji candlestick pattern is formed at this support zone, hinting at possible rebound ahead. Stochastic is near to the oversold zone and MACD remains bearish.

Trading Idea
Wait for better trading idea.

Hang Seng Index
(CFD Symbol: HK50)

Trend:

Recommendation: Short @ 19,840

Last: 18,516

Target price: 18,850 Filled

Protective stop: 19,500

Outlook
Price has been diving for a fourth straight day after breaking out from a sideway consolidation zone. It is currently trading near to the Fibonacci 161% projection level and could be due for a short rebound. Stochastic is at the oversold zone but MACD remains bearish.

Trading Idea.
Sell 19,840 for 18,850 with a stop above 20,000. Entry was filled on 22 May. Shift stop lower to 19,500. Profit order was filled on 25 May.

Nasdaq 100 Index
(CFD Symbol: USTec)

Trend:

Recommendation:

Last: 13,902

Target price:

Protective stop:

Outlook
Price is currently ranging between its recent price top and the 20EMA support. If price could not penetrate above this price high resistance zone, we are likely to see a correction to 13,200. Stochastic is at the overbought zone. MACD could be forming a potential divergence warning.

Trading Idea
Sell 13,960 for 13,250 with a stop above 14,000.

FTSE 100 Index
(CFD Symbol: UK100)

Trend:

Recommendation: Short @ 7772

Last: 7567

Target price: 7670 Filled

Protective stop: 7820

Outlook
Price was resisted by its overhead 20MA resistance point. It further broke down a triangle consolidation pattern and is currently sitting at the Fibonacci 50% correction point. Stochastic is falling and MACD remains bullish

Trading Idea
Sell 7772 for 7670 with a stop above 7820. Entry order was filled on 18 May. Profit order was filled on 25 May.

We have seen it before

Since 1960, the US has resolved debt limit issues 78 times. Biden thinks he can get away easily too – he has added $3t to US debt since Jan 2021. But this year Republicans run the House and are leveraging their right to veto. They want Biden to reduce spending or the US will default. Both parties sound tough but House Speaker McCarthy (Rep) on May 17 said it is possible to reach a deal by the end of the week. If US defaults, could Biden win the next election?

We think a default, if it happens, would be technical in nature. If the issue is going to be resolved, what could happen to the market? The last debt ceiling drama was in 2011 during the Obama era. AFTER the debt ceiling was lifted, the stock market went down by 15% and 10-year treasury yield dropped by 1%. iShares 20 Plus Year Treasury Bond ETF (TLT US) rose 33% in 2.5 months.

As bad as it was, the 2011 crisis provided investors with a reference. Investors can bet on rebounds if the market corrects. For bargain hunting, clients can use Nasdaq ETF QQQ and S&P ETF SPY. Singapore clients can use CFD for leverage. HK clients can use index futures.

Are the traders/issuers nervous? No.
We checked using structured product, we have not seen a significant increase in bids from banks. This means issuers are NOT paying up for downside puts.

Here are some details regarding the implications of the potential default.

• A Treasury Note missing a payment can be delivered into a futures contract, according to CME.
• Compensation for Delayed Payments: Congress need to explicit pass laws to provide compensation to holders of securities subject to a delayed payment on Treasury debt.
• There is no workaround. Biden invoking the 14th Amendment, the Treasury issuing a trillion dollar coin, the Fed swapping out securities under technical default for others, none of these are useful solutions.

Market News

• Wall Street stocks finished sharply lower on Tuesday and short-term Treasury yields shot up as investor jitters grew over a lack of progress in U.S. debt limit talks. Dow Jones fell 231 points, S&P 500 was down 47 points and Nasdaq Composite lost 160 points.

• Representatives of U.S. President Joe Biden and congressional Republicans ended another round of debt ceiling talks on Tuesday, as the deadline drew closer to raise the government’s $31.4 trillion borrowing limit or risk default.

• Oil prices rose after Saudi oil minister Prince Abdulaziz bin Salman told market speculators on Tuesday they should “watch out,” bolstering fears that there could be future challenges in the market.

Market Views

• Asia-Pacific markets slid on Wednesday morning. Hong Kong’s Hang Seng index fell 1.05% and the Hang Seng Tech index shed 1.16%, dragged by healthcare and industrial stocks. Nikkei 225 slid 1.08% even as the country’s business sentiment among manufacturers turned positive for the first time in 2023.

• The Reserve Bank of New Zealand increased its benchmark policy rate by 25 basis points to 5.5% on Wednesday. This is its 12th straight rate hike since October 2021, and in line with expectations from economists polled by Reuters.

Dow Jones Index
(CFD Symbol: US30)

Trend:

Recommendation:

Last: 33,102

Target price:

Protective stop:

Outlook
Price is trading below the falling 20EMA that hints at potential downside ahead. A violation of the support at 32,912 will target for 32,080. Stochastic remains weak and a bearish crossover is likely. MACD is still bearish and is moving lower.

Trading Idea
Wait for better trading idea.

Hang Seng Index
(CFD Symbol: HK50)

Trend:

Recommendation: Short @ 19,840

Last: 19,197

Target price: 18,850

Protective stop: 19,500

Outlook
Price broke below the consolidation zone today with a bearish candle. We would like to see a firm close to confirm the breakdown to 18,810. Stochastic is falling and MACD remains bearish.

Trading Idea.
Sell 19,840 for 18,850 with a stop above 20,000. Entry was filled on 22 May. Shift stop lower to 19,500.

Nasdaq 100 Index
(CFD Symbol: USTec)

Trend:

Recommendation:

Last: 13,695

Target price:

Protective stop:

Outlook
Price could have formed a possible price top at 13,923. We think that price is going to have a price correction to 13,460. Stochastic is at the overbought zone for extended period. MACD is still strong and bullish.

Trading Idea
Sell 13,790 with a stop above 13,940 for 13,460.

FTSE 100 Index
(CFD Symbol: UK100)

Trend:

Recommendation: Short @ 7772

Last: 7728

Target price: 7670

Protective stop: 7820

Outlook
Price was resisted by its overhead 20MA resistance point. As long as it moves below the 20MA, we are likely to see price testing 7569. Stochastic remains weak. MACD is still bearish and is moving lower.

Trading Idea
Sell 7772 for 7670 with a stop above 7820. Entry order was filled on 18 May.

Market News

• U.S. stocks closed higher for a second straight day on Thursday on mounting optimism that a U.S. debt ceiling deal could be reached within days, with discount retailer Walmart providing additional support after an upbeat annual sales forecast.

• The benchmark S&P 500 index rebounded from early declines on news that top U.S. congressional Republican Kevin McCarthy said a deal to raise or suspend the debt ceiling could potentially be reached in time to hold a House vote next week.

• President Joe Biden and McCarthy reiterated their aim to strike a deal soon to raise the $31.4 trillion federal debt ceiling and agreed to talk as soon as Sunday. The debt ceiling has drawn attention away from uncertainty about Fed’s stance on interest rates.

Market Views

• Asian markets were mixed on Friday morning over raising the U.S. debt ceiling, although concerns over a slowing economic recovery in China and a hawkish Fed kept gains limited. Hang Seng index fell 189 points while Nikkei 225 index gained 263 points.

• The Hang Seng was pressured by losses in e-commerce giant Alibaba Group, which tumbled 5.3% after its first-quarter revenue missed estimates. The group is facing slowing demand in China as the country’s digital markets mature and as it faces increased competition from other players.

Dow Jones Index
(CFD Symbol: US30)

Trend:

Recommendation:

Last: 33,559

Target price:

Protective stop:

Outlook
Price rebounded from its previous low support zone with a bullish engulfing candlestick pattern. However, there is a nearer resistance at 33,744 that price has to breakthrough for 34,260. There is a bullish Stochastic crossover. MACD is rising towards the zero line.

Trading Idea
Wait for better trading idea

Hang Seng Index
(CFD Symbol: HK50)

Trend:

Recommendation:

Last: 19,461

Target price:

Protective stop:

Outlook
This index is trading near to its lower boundary of the sideway consolidation zone. We think that price has higher chance to break down this consolidation zone to 18,810. The 20EMA is falling and the MACD remains bearish.

Trading Idea.
Sell 19,840 for 18,850 with a stop above 20,000.

Nasdaq 100 Index
(CFD Symbol: USTec)

Trend:

Recommendation: Short @ 13,450

Last: 13,862

Target price: 13,230

Protective stop: 13,520

Outlook
Price hit its Fibonacci 261% projection level today after the breakout. As price is trading far above the 20EMA and the Stochastic is at the overbought zone, we think that price may have a correction to the 20EMA before the next strong movement.

Trading Idea
Sell 13,450 for 13,230 with a stop above 13,520. Entry and stop orders were filled on 17 May.

FTSE 100 Index
(CFD Symbol: UK100)

Trend:

Recommendation: Short @ 7772

Last: 7766

Target price: 7670

Protective stop: 7820

Outlook
Price was resisted by its overhead 20MA resistance point. As long as it moves below the 20MA, we are likely to see price testing 7564. Stochastic remains weak and MACD is still bearish at the moment.

Trading Idea
Sell 7772 for 7670 with a stop above 7820. Entry order was filled on 18 May.