This is a post-CNY update with a look at CME odds of a March rate hike (83%). Additionally I take a closer look at JP225 and SG30. JP225 is clearly the weaker leg in the correction and their relative performance suggests JP225 has more to lose. For SG30, recall that 399 is a strong level to test.
Day to day price action suggests that US stock indices are struggling to hold on to a 10% level off 52-week high. This level is associated with ‘correction’. At 20%, it’s bear market. In absolute terms, this correction is horrid. It dwarfs ‘Black Monday’ on August 24, 2015. Delusion or meaningful?
Chinese New Year is coming so there will be a 1-2 week period where a significant segment of traders go away. Low volume environment could lead to melt-up or melt-down easily (see green zone). Moving average suggest 13-week ema could become potential resistance. Could see pinball action as market fights.
5 features in this chart define SiMSCI trend and risk-reward proposition for traders: 1) rising equidistant channel since late-2016 2) steep trend line from September 2017 3) February high 4) major 2015-top at 399 and lastly 5) rising month-month price action.
Straits Times Index was up 131.07 points or 3.85% over the previous month. Out of 30 constituent stocks, 23 gained, 5 lost and 2 closed unchanged. Venture Corp takes over GLP in a special change on the index. Venture is best performing index stock over 3 years.
XLP retains it’s status as a leading bear sector in the US market. At the moment, moving averages, price action and chart pattern paint a bearish reversal setup. 1) Moving average dead cross. 2) Bearish expansion in January terminates last 4 quarters of higher lows. 3) Fallen out of equidistant channel.
This weekly chart of Zijin Mining (2899.hk) is an excellent example illustrating various technical analysis concepts: 1) Moving averages as a roadmap that provides direction, support. 2) Chart pattern reveals continuation (base building) or reversal. 3) Volume as an excellent companion of price movement.