Australia: S&P/ASX 200 (ASX:.AXJO) set to plummet as markets suffered a sweeping global sell-off amid the escalation of the Sino-US trade and currency war

Australia: S&P/ASX 200 (ASX:.AXJO) set to plummet as markets suffered a sweeping global sell-off amid the escalation of the Sino-US trade and currency war

Australia: S&P/ASX 200 (ASX:.AXJO) set to plummet as markets suffered a sweeping global sell-off amid the escalation of the Sino-US trade and currency war

Australian shares are set to plummet as markets suffered a sweeping global sell-off amid the escalation of the Sino-US trade and currency war. The RBA meets today but markets don’t expect any movement on rates.

Trade sensitive tech stocks were particularly hard hit with Apple suffering its biggest drop in two months. Apple fell 4.8 per cent and Australian tech darling Atlassian was down 5.8 per cent near 4.50am AEST.

China’s state media reported that Chinese firms had suspended purchasing US agricultural products and the government says it hasn’t ruled out the possibility of slapping tariffs on products purchased after August 3.

The US economy is still growing, the unemployment rate remains close to its healthiest level in nearly half a century and US stock indexes set record highs just over a week ago. But the escalating trade tensions and disappointment that the Federal Reserve has not committed to a lengthy series of interest-rate cuts have sent the S&P 500 on a losing streak set to hit its sixth day, which would be its longest since October.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 6,560.21.

The projected upper bound is: 6,767.94.

The projected lower bound is: 6,520.03.

The projected closing price is: 6,643.99.

Candlesticks

A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 6.7638. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 3 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 42.84. 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 20 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 -75. This is not a topping or bottoming area. The last signal was a sell 3 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 0 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -128.300 at 6,640.300. Volume was 3% below average (neutral) and Bollinger Bands were 6% wider than normal.

Open     High      Low     Close     Volume___
6,768.6006,768.6006,639.4006,640.300 594,672,704
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 6,779.40 6,624.50 6,148.96
Volatility: 14 12 14
Volume: 630,175,104 640,141,440 624,439,808

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.

Summary

S&P/ASX 200 is currently 8.0% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of .AXJO at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .AXJO and have had this outlook for the last 0 periods.

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