Shanghai: SSE Composite Index (.SSEC) investors seek new catalysts after a long holiday weekend while monitoring U.S.-China trade tensions

Shanghai: SSE Composite Index (.SSEC) investors seek new catalysts after a long holiday weekend while monitoring U.S.-China trade tensions

Shanghai: SSE Composite Index (.SSEC) investors seek new catalysts after a long holiday weekend while monitoring U.S.-China trade tensions

U.S. stocks closed near intraday lows Tuesday after major benchmarks surrendered earlier gains as investors sought new catalysts after a long holiday weekend while monitoring U.S.-China trade tensions.

How did major benchmarks fare?
The Dow Jones Industrial Average DJIA, -0.93% shed 237.92 points, or 0.9%, to 25,347.77, while the S&P 500 index SPX, -0.84% fell 23.67 points, or 0.8%, to 2,802.39. The Nasdaq Composite Index COMP, -0.39% dropped 29.66 points, or 0.4%, to 7,607.35.

U.S. financial markets were closed Monday for Memorial Day. Stocks ended higher Friday but booked losses for the week, extending the Dow’s weekly losing streak to five, its longest since June 2011. The Dow saw a 0.7% weekly fall, while the S&P 500 logged a 1.2% retreat and the Nasdaq Composite gave up 2.3%.

The major indexes remain solidly higher for the year to date but have retreated significantly in May as U.S.-China trade tensions have heated up. Washington and Beijing have engaged in a round of tit-for-tat tariff escalations, while the Trump administration has moved to blacklist U.S. exports to Chinese telecom-equipment firm Huawei Technologies Co., prompting threats of further retaliation by China.

President Donald Trump, speaking at a joint news conference Monday in Tokyo with Japanese Prime Minister Shinzo Abe, said the U.S. wasn’t ready to make a trade deal with China.

“They (China) would like to make a deal. We’re not ready to make a deal,” Trump said, according to Bloomberg. He added that tariffs on Chinese products could go up “very substantially.”

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 2,955.19.

The projected upper bound is: 3,048.27.

The projected lower bound is: 2,766.87.

The projected closing price is: 2,907.57.

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 26 white candles and 24 black candles for a net of 2 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 58.4360. This is not an overbought or oversold reading. 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 44.00. 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 12 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 45. This is not a topping or bottoming area. 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 buy 1 period(s) ago.

Rex Takasugi – TD Profile

SSE COMPOSITE closed up 17.532 at 2,909.911. Volume was 25% below average (neutral) and Bollinger Bands were 17% narrower than normal.

Open High Low Close Volume___
2,890.2662,924.0402,887.0832,909.91122,331,056,128

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

Moving Averages: 10-period 50-period 200-period
Close: 2,895.28 3,059.97 2,776.14
Volatility: 24 30 28
Volume: 21,506,707,456 31,282,757,632 21,230,194,688

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

SSE COMPOSITE is currently 4.8% above 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 .SSEC (mildly bearish). Our trend forecasting oscillators are currently bearish on .SSEC and have had this outlook for the last 20 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.

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