Australia: S&P/ASX 200 (.AXJO) set for more heavy losses as Trump says China trade deal can wait
Global stocks fell broadly after President Donald Trump cast doubt over the potential for a trade deal with China this year and threatened to impose tariffs on French goods.
The selling knocked the Dow Jones Industrial Average more than 350 points lower and had the S&P 500 on track for its third straight loss as the market continued to give up gains after a strong November rally.
The ASX is set for another heavy day of losses, with futures at 5.30am AEDT pointing to a fall of 64 points, or 1 per cent, at the open. On Monday, the ASX shed $47 billion as it fell by 2.2 per cent, recording its worst day in four months.
Trump said he has “no deadline” for a deal and didn’t mind waiting until after the 2020 election to make one. Investors had been hoping for a deal this year, or at least enough progress to stave off new US tariffs on Chinese goods, including smartphones and laptops, scheduled to start December 15.
Technology stocks led the losses. The sector is highly sensitive to twists in the trade dispute because many of the companies rely on China for sales and supply chains. Apple slumped 2.4 per cent and Intel fell 2.6 per cent.
Bank stocks also suffered heavy losses as investors headed for the safety of bonds and pushed yields lower. Banks rely on higher bond yields to charge more lucrative interest rates on mortgages and other loans. The yield on the 10-year Treasury fell sharply to 1.7 per cent from 1.83 per cent late Monday.
Bank of America shed 2.4 per cent and Citigroup fell 2.3 per cent.
Utilities and real estate companies held up the best as investors shifted money to the safe-play sectors.
Asian and European markets also fell.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 6,663.02.
The projected upper bound is: 6,865.26.
The projected lower bound is: 6,557.87.
The projected closing price is: 6,711.57.
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 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 white candles.
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 51.2171. This is not an overbought or oversold reading. The last signal was a sell 0 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 46.71. 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 106 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 -25. 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
S&P/ASX 200 closed down -150.000 at 6,712.300. Volume was 9% above average (neutral) and Bollinger Bands were 17% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 6,775.92 6,698.69 6,517.22
Volatility: 18 15 13
Volume: 636,124,928 587,118,016 637,224,640
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.
S&P/ASX 200 is currently 3.0% above its 200-period moving average and is in an upward 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 moderate flows of volume into .AXJO (mildly bullish). Our trend forecasting oscillators are currently bullish on .AXJO and have had this outlook for the last 26 periods.
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