Shanghai: SSE Composite Index (.SSEC) – Asian stocks mixed after Wall Street sinks despite rate cut
Asian stock markets were mixed Wednesday after Wall Street sank despite an emergency U.S. interest cut aimed at defusing fears a virus outbreak might depress global economic activity.
Benchmarks in Shanghai and Sydney declined while Tokyo and Seoul advanced. Hong Kong was little-changed.
On Wall Street, the benchmark S&P 500 index tumbled 2.8% on Tuesday despite the Federal Reserve’s surprise 0.5% rate cut. It was the index’s eighth daily decline in nine days.
Markets also appeared to be unimpressed by a pledge from the Group of Seven major industrialized countries to support the global economy that included no specific measures.
China, Australia and other central banks also have cut rates to shore up economic growth in the face of anti-virus controls that are disrupting trade and manufacturing. But economists warn that while cheaper credit might encourage consumers, rate cuts cannot reopen factories that have closed due to quarantines or lack of raw materials.
“Despite the Fed cutting rates in support of the U.S. market, fear had clearly returned to reign in the markets,” Jingyi Pan of IG said in a report.
More reductions may give “limited support,” Pan wrote. “Perhaps besides vaccines, there may be little quick and easy solution to easing the shock for global markets.”
The Shanghai Composite Index lost 0.3% to 2,983.25 and the S&P-ASX 200 in Sydney retreated 1.7% to 6,325.40.
U.S. markets have fallen 11% since setting a record two weeks ago.
Federal Reserve Chairman Jerome Powell acknowledged the ultimate solution to the virus challenge will have to come from health experts and others, not central banks.
The Fed has a long history of coming to the market’s rescue with lower rates and other stimulus, which has helped this bull market in U.S. stocks become the longest on record.
On Monday, the Dow recorded its biggest daily gain in more than a decade on rising anticipation for co-ordinated support from the Fed and other central banks. Even before Tuesday’s announcement, traders were convinced he Fed would cut rates by half a percentage point on March 18 at its next meeting.
The U.S. rate cut was the Fed’s first outside a regularly scheduled meeting since the 2008 global crisis. That prompted some traders to think the Fed might foresee an even bigger economic impact than markets fear.
Benchmark U.S. crude gained 65 cents to $47.83 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 43 cents on Tuesday to close at $47.18. Brent crude, used to price international oils, added 68 cents to $52.54 per barrel in London. It fell 4 cents the previous session to close at $51.86 a barrel.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 3,214.56.
The projected lower bound is: 2,930.76.
The projected closing price is: 3,072.66.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 white candles.
A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend.
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 89.1474. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 7 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 59.70. 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 21 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 162.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 3 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 1 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed up 60.011 at 3,071.677. Volume was 98% above average (neutral) and Bollinger Bands were 11% wider 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: 2,999.07 2,998.50 2,943.09
Volatility: 33 31 21
Volume: 39,736,057,856 28,187,711,488 20,150,024,192
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 up today (bullish) 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 4.4% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect moderate flows of volume into .SSEC (mildly bullish). Our trend forecasting oscillators are currently bullish on .SSEC and have had this outlook for the last 0 periods.
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