Shanghai: SSE Composite Index (.SSEC) – Asia shares suffer virus chills, central banks offer cold comfort
Asian shares slid on Monday as fears mounted that the global coronavirus shutdown could last for months although markets regained some lost ground late in the session with Australia posting a standout jump.
U.S. and European futures also turned upwards in the Asian afternoon, with E-Mini futures for the S&P 500 up 1.1%, again after earlier losses, EUROSTOXXX 50 futures rallying 2% and FTSE futures 1.5%.
Australia’s benchmark ASX200 saw a late surge, closing up 7% after Prime Minister Scott Morrison unveiled a $130 billion ($79.86 billion) package to help save jobs.
Most other markets were down but trimmed earlier losses. Japan’s Nikkei dropped 1.57%, Shanghai blue chips were down 0.94%, and there were sharper drops in Southeast Asia, with Singapore’ benchmark index down 2.95%.
That left MSCI’s broadest index of Asia-Pacific shares outside Japan nearly flat.
“Markets in Asia are reacting to concerns about the knock-on economic impact of the coronavirus situation in Europe and North America, rather than Asian case numbers,” said Suresh Tantia senior investment strategist at Credit Suisse.
JPMorgan now predicts that global GDP could contract at a 10.5% annualised rate in the first half of the year.
China on Monday became the latest to add stimulus with a cut of 20 basis points in a key repo rate, the largest in nearly five years.
Singapore also eased as the city-state’s bellwether economy braced for a deep recession, while New Zealand’s central bank said it would take corporate debt as collateral for loans.
Rodrigo Catril, a senior FX strategist at NAB, said the main question for markets was whether all the stimulus would be enough to help the global economy withstand the shock.
“To answer this question, one needs to know the magnitude of the containment measures and for how long they will be implemented,” he added. “This is the big unknown and it suggests markets are likely to remain volatile until this uncertainty is resolved.”
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 2,891.23.
The projected upper bound is: 2,903.82.
The projected lower bound is: 2,576.81.
The projected closing price is: 2,740.31.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 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.
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 72.4967. 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 40.65. 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 buy 38 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 -44. This is not a topping or bottoming area. The last signal was a buy 4 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 0 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed down -24.990 at 2,747.214. Volume was 6% below average (neutral) and Bollinger Bands were 100% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 2,740.47 2,923.85 2,936.77
Volatility: 32 36 23
Volume: 26,461,730,816 30,572,840,960 20,959,660,032
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.
SSE COMPOSITE 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.
SSE COMPOSITE is currently 6.5% 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 volume flowing into and out of .SSEC at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .SSEC and have had this outlook for the last 10 periods.