Hong Kong: HANG SENG INDEX (.HSI) Tensions mount as negotiators meet on Thursday

Hong Kong: HANG SENG INDEX (.HSI) Tensions mount as negotiators meet on Thursday

Hong Kong: HANG SENG INDEX (.HSI) Tensions mount as negotiators meet on Thursday

The U.S. issued an official notice Wednesday stating that it will raise tariffs on $200 billion in Chinese goods from Friday as threatened by President Donald Trump, ratcheting up tensions just as trade negotiations with China are set to resume.

China’s Commerce Ministry, meanwhile, issued a statement Wednesday night saying it had no choice but to take necessary retaliatory measures if the U.S. were to raise tariffs.

The Office of the U.S. Trade Representative said the additional duties imposed in September will rise to 25% from 10%, according to a notice posted in the Federal Register. The mandatory notice was issued a day later than expected, likely to give Washington more time to gauge Beijing’s response to Trump’s initial threat made Sunday.

White House spokeswoman Sarah Sanders told reporters on Wednesday that the U.S. has received an “indication” from China that it wants to make a trade deal.

China is proceeding with the talks, despite previously insisting it would not negotiate with the U.S. holding the threat of tariffs over its head. But the meeting has been shortened to two days from three, and Beijing is expected to send a smaller delegation than the 100 people it originally planned.

Vice Premier Liu He, China’s lead negotiator, will not hold the status of “special envoy” for President Xi Jinping as he did during talks in February, raising questions as to how much authority he will have to make decisions.

In the Commerce Ministry statement, China said that it “deeply regrets” the U.S. plan to raise tariffs, and noted that the escalation of trade frictions are “not in the interest of either country or the world.”

Trump blamed the impasse on Beijing reneging on earlier commitments, taking a jab Wednesday at his domestic political opponents in the process while signaling that he would be pleased to maintain the status quo.

“The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to ‘negotiate’ with Joe Biden or one of the very weak Democrats, and thereby continue to ripoff the United States (($500 Billion a year)) for years to come,” he tweeted. “Guess what, that’s not going to happen!”

“We’ll see” whether a deal can be made, Trump continued, but reiterated his long-held stance that he is “very happy” that tariffs are “filling U.S. coffers” and that this was “great for U.S., not good for China!”

Beijing, which is compromising merely by participating in the talks, is leery of making further concessions on issues such as state subsidies to core industries — a major U.S. complaint — as this could be taken domestically as a sign of weakness.

The Chinese side “will never compromise on matters of principle,” the state-run Xinhua News Agency wrote in an editorial Tuesday.

As for the U.S., the tariff increase has drawn vocal opposition from business groups, but Trump’s tough stance on China holds bipartisan support in Congress.

“Although the Chinese delegation decided to go to the US for negotiations, as far as I know, the situation is more tense than the Western media speculated,” Hu Xijin, editor in chief of the Chinese Communist Party-run Global Times, tweeted Tuesday night. “The possibility of an escalation of China-US trade war is seriously increasing.”

This prospect has rattled global markets. The Shanghai Composite Index has plunged 6% so far this week to its lowest level in two and a half months, while Hong Kong’s benchmark Hang Seng Index dropped 4%.

In Japan, the Nikkei Stock Average tumbled 321 points on Wednesday, and the yen temporarily strengthened beyond 110 against the dollar for the first time in a month and a half as investors fled to safety.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 29,790.23.

The projected lower bound is: 28,231.10.

The projected closing price is: 29,010.66.

Candlesticks

A white body occurred (because prices closed higher than they opened).
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 27 white candles and 23 black candles for a net of 4 white candles.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 21.1822. This is not an overbought or oversold reading. 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 40.73. 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 17 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 -172.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 6 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 12 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed down -359.820 at 29,003.199. Volume was 21% above average (neutral) and Bollinger Bands were 29% narrower than normal.

Open High Low Close Volume___
28,987.09029,252.00028,945.91029,003.1992,250,311,168

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

Moving Averages: 10-period 50-period 200-period
Close: 29,615.43 29,323.95 27,519.80
Volatility: 22 17 22
Volume: 1,757,220,608 1,988,658,688 1,817,781,504

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 is currently 5.4% 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 .HSI at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .HSI and have had this outlook for the last 1 periods.

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