Shanghai: SSE Composite Index (.SSEC) Brace Yourself, Today Could be US-China Tariff Decision Day
Stocks in Asia closed mixed, with China’s Shanghai Index falling -0.3% and the Australian ASX 200 down -0.7% while the Hong Kong Hang Seng gained 1.3%, and the South Korean Kospi rose 1.5%. The major European equity indices were all slightly in the green by midday trading despite today’s glum Industrial Production numbers for the region and nerves around the election in the UK. US equity futures are technically positive but point to a market open that is poised to be little changed.
One day after the Fed did just what it was expected to do, new European Central Bank President Christine Lagarde convened her first policy meeting. As expected, the Governing Council voted to keep the main deposit rate at -0.5%. Later today, the ECB’s latest economic forecasts will be released. Those forecasts are expected to include 2022, the first year in which the ECB anticipates exiting its stimulus program. In terms of additional monetary policy exiting today’s meeting, the market is pricing less than 50% odds of an additional rate cut.
UK voters head to the polls today for the nation’s third general election in just five years. While of those even those outside of the country are suffering from Brexhaustion, this vote is pivotal. The UK has been trying to break up with the EU for three years now, but with parliament at a standstill, Prime Minister Boris Johnson called for this election as a way to “get Brexit done.” TBD if that was a brilliant move or career-ending. If Johnson wins a majority, he says he’ll get Brexit done by the end of January. If Jeremy Corbyn wills, he has promised to renegotiate a Brexit deal (such fun!) and offer a second Brexit referendum.
All of that is happening as the question remains, “Will they, won’t they implement the latest round of tariffs on Chinese imports December 15?” Despite reports early this week that the White House was considering delaying those tariffs, more recent reports suggest the $160 billion in tariffs are a go, and the administration is preparing talking points to explain their rationale. Today the President is expected to meet with top trade advisors – stay tuned.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 2,969.72.
The projected lower bound is: 2,861.14.
The projected closing price is: 2,915.43.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with SSE COMPOSITE). It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 85.2813. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 18 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 50.82. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 57 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 98. This is not a topping or bottoming area. The last signal was a sell 0 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 4 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed down -8.719 at 2,915.698. Volume was 7% below average (neutral) and Bollinger Bands were 59% narrower than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 2,899.40 2,930.91 2,963.50
Volatility: 7 12 22
Volume: 14,262,055,936 14,466,576,384 22,741,020,672
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
SSE COMPOSITE is currently 1.6% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of .SSEC at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .SSEC and have had this outlook for the last 0 periods.