Shanghai: SSE Composite Index (.SSEC) markets are preparing for the final round of central bank meetings for the year
Australian shares are set to open lower after Wall Street plunged on the back of weak economic data from China and ongoing Brexit frustration. Markets are preparing for the final round of central bank meetings for the year. ASX futures were down 32 points to 5580 at 5.50am AEDT on Monday. The $A was down 0.7 per cent at 71.76 US cents.
Shares on Wall Street plummeted to an eight-month low with the Dow confirming a correction and as signs emerged of a bear market in key sectors.
The main local data for the week is the release of Reserve Bank of Australia minutes on Tuesday. Capital Economics analysts said, “The RBA minutes and the government’s outlook may give us some insight around the direction of monetary and fiscal policy. Labour market data are likely to show that the unemployment rate remained steady in November. And in New Zealand, we think that GDP growth softened in the third quarter.”
Chinese stocks fell along with the currency as data signalled a deepening slowdown in the economy. Losses in equities gathered pace in the afternoon, led by health-care shares. The CSI 300 Index closed down 1.7 per cent and the ChiNext gauge of small caps slid 2.8 per cent, while Hong Kong’s Hang Seng Index fell 1.6 per cent. The yuan weakened 0.41 per cent in offshore trading and the yield on 10-year government debt rose 1 basis point to 3.37 per cent.
Industrial production growth in November slowed to 5.4 per cent, below all estimates, and retail sales growth decelerated to 8.1 per cent, also missing forecasts. Fixed-asset investment picked up. “The economic data this morning suggest that the Chinese economy will not get better in the near term,” said Castor Pang, head of research at Core Pacific-Yamaichi International. “The market will remain very volatile and closely follow the news flow about the trade talks through the end of this year.”
Investor sentiment has been fragile amid concerns over the economy and uncertainties over China-US trade relations, contributing to large swings in markets. The Shanghai Composite Index is down 22 per cent this year, while the yuan has depreciated more than 5 per cent.
Overall, the bias in prices is: Downwards
By the way, prices are vulnerable to a correction towards 2,691.23.
The projected upper bound is: 2,718.98.
The projected lower bound is: 2,459.40.
The projected closing price is: 2,589.19.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.
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 51.4765. This is not an overbought or oversold reading. The last signal was a buy 2 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 46.17. 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 40 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 -8. This is not a topping or bottoming area. The last signal was a buy 12 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 sell 0 period(s) ago.
Rex Takasugi – TD Profile
SSE COMPOSITE closed down -40.308 at 2,593.741. Volume was 2% above average (neutral) and Bollinger Bands were 31% narrower 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: 2,619.02 2,618.15 2,887.86
Volatility: 23 31 24
Volume: 13,953,611,776 16,377,227,264 14,436,708,352
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 is currently 10.2% below its 200-period moving average and is in an downward trend. Volatility is relatively normal 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 3 periods.