Hong Kong: HANG SENG INDEX (.HSI) markets fell following Wall Street’s lead as the U.S. and China appeared to brace for a prolonged trade standoff

Hong Kong: HANG SENG INDEX (.HSI) markets fell following Wall Street’s lead as the U.S. and China appeared to brace for a prolonged trade standoff

Hong Kong: HANG SENG INDEX (.HSI) markets fell following Wall Street’s lead as the U.S. and China appeared to brace for a prolonged trade standoff

Asian markets fell Thursday, following Wall Street’s lead as the U.S. and China appeared to brace for a prolonged trade standoff.

After last week’s escalation of tariffs, no new trade talks have been scheduled, and many analysts suspect a breakthrough will require an intervention at the top before the Group of 20 major economies meets next month in Osaka, Japan.

“For a deal, there needs to be a Trump-Xi call, which would enable a useful Lighthizer visit to Beijing,” said Derek Scissors, a China specialist at the conservative American Enterprise Institute. “Then the two leaders could meet in Osaka and compromise on at least one major issue: reinvigorating the talks.”

The U.S. has imposed 25% tariffs on $250 billion in Chinese imports and is planning to target another $300 billion. It has also mounted sanctions against Huawei and is threatening to do the same with other Chinese companies. China, meanwhile, has retaliated against $110 billion in U.S. products.

“The stalemate between the U.S. and China looks likely to last longer as both sides continued to ratchet up rhetoric,” Zhu Huani of Mizuho Bank said in a commentary.

“Despite potential significant negative spillover effect this might have on U.S. firms, the Trump administration seems determined to curb China’s rise in technology advancement,” she added.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 28,505.97.

The projected upper bound is: 28,105.07.

The projected lower bound is: 26,368.70.

The projected closing price is: 27,236.88.

Candlesticks

A black body occurred (because prices closed lower than they opened).
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 26 white candles and 24 black candles for a net of 2 white candles.

A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 5 falling windows in the last 50 candles–this makes the current falling window even more bearish. The two candles preceding the falling window were black, which makes this pattern even more bearish.

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 9.0227. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 6 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 26.86. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 1 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 -127.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 1 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 22 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed down -438.809 at 27,267.131. Volume was 17% above average (neutral) and Bollinger Bands were 89% wider than normal.

Open High Low Close Volume___
27,505.52927,523.85927,169.67027,267.1312,288,057,600

Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 27,989.15 29,152.01 27,496.76
Volatility: 19 19 22
Volume: 2,387,451,648 2,002,317,184 1,849,787,264

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

HANG SENG INDEX gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
HANG SENG INDEX is currently 0.8% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of .HSI (mildly bearish). Our trend forecasting oscillators are currently bearish on .HSI and have had this outlook for the last 11 periods. Our momentum oscillator is currently indicating that .HSI is currently in an oversold condition.

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