Australia: S&P/ASX 200 (.AXJO) plummeted after renewed concerns about US-Chinese trade tensions

Australia: S&P/ASX 200 (.AXJO) plummeted after renewed concerns about US-Chinese trade tensions

Australia: S&P/ASX 200 (.AXJO) plummeted after renewed concerns about US-Chinese trade tensions

The Australian share market has plummeted after renewed concerns about US-Chinese trade tensions led to large losses on Wall Street overnight.

The benchmark S&P/ASX200 index was down 57.7 points, or 0.92 per cent, to 6,239.9 points at 1615 AEST on Tuesday, while the broader All Ordinaries was down 54.1 points, or 0.85 per cent, to 6,327.2.

“No surprises, it’s been a pretty gloomy day, continuing some of the worst losses we’ve seen in 2019 for the States,” said CommSec market analyst James Tao.

There were losses across the world after the Chinese government announced overnight it would impose higher tariffs on a range of US goods in a tit-for-tat retaliation to US levies on China.

The two sides were still talking, however, and US President Donald Trump told reporters they would know “in three or four weeks” if the talks were successful.

Financial shares were the worst hit on the ASX, collectively falling 1.78 per cent, as all four big banks slipped and NAB traded ex-dividend.

NAB was down 4.68 per cent to $24.24, Commonwealth was down 1.27 per cent to $72.57, ANZ was down 1.25 per cent to $26.10 and Westpac was down 0.81 per cent to $26.90.

The Aussie dollar is buying 69.52 US cents, from 69.75 US cents on Monday.

Looking to the future, Shayne Heffernan said traders would be watching Australian wage data set to be released on Wednesday and jobs data to be released on Thursday for a hint as to whether the Reserve Bank would cut interest rates.

If 20,000 jobs are created and unemployment holds steady at five per cent, the RBA would be inclined to keep interest rates steady, but weakness in the labour market would put pressure on the RBA to cut rates.

“The next couple of days will be very interesting on the economic calendar,” Shayne Heffernan said.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 6,339.04.

The projected lower bound is: 6,143.59.

The projected closing price is: 6,241.32.

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 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.

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 51.5075. This is not an overbought or oversold reading. The last signal was a sell 10 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 45.05. 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 11 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 -140.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 10 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 6 period(s) ago.

Rex Takasugi – TD Profile

S&P/ASX 200 closed down -57.700 at 6,239.900. Volume was 13% above average (neutral) and Bollinger Bands were 33% narrower than normal.

Open High Low Close Volume___
6,297.6006,297.6006,203.1006,239.900 685,229,184

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 6,304.23 6,239.62 6,032.88
Volatility: 10 10 14
Volume: 564,811,904 610,948,992 611,430,336

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 3.4% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of .AXJO at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .AXJO and have had this outlook for the last 18 periods.

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