Jump to content

Bearish end to the week following Fed meeting: Nasdaq 100, ASX 200, Silver


Recommended Posts

Major US indices largely followed through with its post-Fed sell-off to end last week and while there were some attempts for a last-hour recovery, efforts were short-lived and quickly overturned.

FedSource: Bloomberg
 

 Yeap Jun Rong | Market Strategist, Singapore | Publication date: Monday 19 December 2022 

Market Recap

Major US indices largely followed through with its post-Fed sell-off to end last week and while there were some attempts for a last-hour recovery, efforts were short-lived and quickly overturned. All 11 S&P 500 sectors closed in the red, with the communication services sector tapping on some strength in Meta Platforms’ share price for resilience. The US flash Purchasing Managers' Index (PMI) readings for December provided the only economic data of note, which came in lower-than-expected. Both the manufacturing (46.2 versus 47.7 forecast) and services (44.4 versus 46.8 forecast) sectors revealed a deeper push into contractionary territory, but with the Federal Reserve (Fed) seemingly unwavered on loosening up its hawkish stance at its recent meeting, the poor economic data did little in shifting market rate hike expectations. For now, market expectations still remain more dovish than the Fed’s views, which may run the risk of further hawkish recalibration if the Fed hold firm on its outlook. Recent comments from Fed officials suggested the likely possibility, with New York Fed President John Williams stating that the Fed may raise rates more than it expects next year while San Francisco Fed President Mary Daly reiterated the absence of rate cuts until 2024.

Coming after a period of consolidation, the Nasdaq 100 index has broken below its key support at the 11,600 level in the aftermath of the Fed meeting. This may leave a retest of its previous bottoms at the 10,600 level on watch, where a Fibonacci confluence zone resides. Heading into the new week, there may be some near-term attempts to stabilise after the aggressive sell-off last week, but the overall downward bias will seem to remain until the longer-term downward trendline is overcome.

 

NasdaqSource: IG charts

 

Asia Open

Asian stocks look set for another negative open, with Nikkei -1.29%, ASX -0.19% and KOSPI -0.61% at the time of writing. Chinese equities may remain fairly resilient, with the Nasdaq Golden Dragon China Index eking out a positive close of 0.35% to end last week, but the last-hour sell-off could still suggest a cautious risk environment. The key event this week may be the Bank of Japan (BoJ) interest rate decision tomorrow and while a no-change in accommodative stance is still the consensus, any shift in tone to lay the groundwork for an eventual rise in interest rates next year will be heavily scrutinised. Current market expectations are not pricing for any rate changes until April 2023.

Having broken below a downward trendline in early-December, the ASX 200 has further pushed to a new lower low last week, which suggests a reversal in sentiments at play. There were some attempts to stabilise this morning after retesting its November low, but with the near-term downward bias in place, that may leave the formation of any lower high on watch. Further downside could leave the 7,020 level on watch ahead.

 

ASX 200Source: IG charts

 

On the watchlist: Hammer formation in silver suggests some dip-buying efforts

After a post-Fed sell-off brought silver prices to its one-week low, the formation of a bullish hammer candlestick to end the week suggests some dip-buying efforts in retaining silver prices’ upward trend. Renewed strength in the US dollar and higher Treasury yields will be on watch as potential headwinds capping silver prices’ upside but for now, both have been trading on lower highs and lower lows despite a hawkish takeaway from the recent Fed meeting. Any confirmation close above the near-term hammer candlestick formation could further reinforce an attempt to move higher this week, leaving the US$24.20 level on watch as potential resistance. On the contrary, any downward break of the upward trendline could leave the key US$25.00 support in focus.

 

SilverSource: IG charts

 

Friday: DJIA -0.85%; S&P 500 -1.11%; Nasdaq -0.97%, DAX -0.67%, FTSE -1.27%

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      22,111
    • Total Posts
      92,978
    • Total Members
      42,497
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    vigilantrelic
    Joined 04/06/23 19:52
  • Posts

    • Stock Market Elliott Wave Summary: SP500 - NASDAQ 100 - RUSSELL 2000 - DAX 40 - FTSE 100 - ASX 200 SP 500:  Expect the price above and below 4,300 the top of Minor Group 1 and the 61.8% retracement level from the all-time high. Expect a Classic TradingLevels pattern at 4,300 then further upside... Nasdaq 100: heading slightly higher into Elliott Wave (v) of iii) with next resistance Minor Group 2 14,650 with support at 14,500 and 14,300 for Wave iv) Russell 2000: Support 1830, next target 1850 DAX 40: Elliott Wave (iii) to 16,100 Wave (iv) retesting 16,000. FTSE 100: wave (iii) top 7650 then expect wave (iv) correction 7630. ASX 200: Elliott Wave c of (iv) back towards 7200 - 7210 then upwards towards 7265 – 7300 Video Chapters 00:00 SP 500 (SPX) 10:05 NASDAQ (NDX) 14:08 Russell 2000 (RUT) 18:07 DAX 40 (DAX) 27:25 FTSE 100 (UK100) 30:09 ASX 200 (XJO) 38:10 End Analyst Peter Mathers TradingLounge™ Australian Financial Services Licence - AFSL 317817 Source: tradinglounge com   Access Trial    
    • The inclusion of trading volume as a standard indicator in charting software for the past three decades is not without reason—it offers a vital advantage. Volume analysis grants traders valuable insights into the actions of market participants at different price levels. By focusing on volume, traders can react more effectively to price movements rather than attempting to predict the future direction of prices, as is often the case with many other technical indicators. 📍Key points about volume Here are the key points regarding the volume indicator commonly plotted on the X-axis in trading: 🔹Volume Indicator: The volume indicator calculates the total number of shares or contracts traded during a specified time period. It is usually displayed as a histogram or line chart, with time represented on the X-axis. 🔹Liquidity: Volume is a critical metric as it provides insights into the liquidity of a security. Higher volume generally indicates greater market participation and liquidity, making it easier to buy or sell the asset without significantly impacting its price. 🔹Confirmation: Volume can validate the authenticity of price movements. In an uptrend, increasing volume supports the bullish move, indicating strength and conviction among buyers. Conversely, declining volume during an uptrend may signal weakness or lack of interest. The same principles apply to downtrends. 🔹Breakouts and Reversals: Volume analysis is often employed to identify breakouts and potential trend reversals. A significant increase in volume during a breakout suggests a higher probability of a sustained move, while decreasing volume near a support or resistance level might indicate a potential reversal. 🔹Divergence: Volume can unveil discrepancies between price and market sentiment. For instance, if prices are rising while volume is decreasing, it could suggest that the rally is losing momentum and a reversal may be imminent. Similarly, increasing volume during a price decline might indicate selling pressure and the potential for further downside. 🔹Confirmation of Patterns: Volume can serve to confirm or invalidate chart patterns such as triangles, head and shoulders, or double tops/bottoms. Higher volume during pattern formations enhances their reliability, while low volume can cast doubt on the significance of the pattern. 🔹Watch for High Volume: Unusual spikes in volume can indicate significant market events, such as earnings releases, news announcements, or institutional buying/selling. Abnormal volume levels can lead to increased volatility and potentially present trading opportunities. 🔹Relative Volume: Comparing current volume to historical average volume helps assess the significance of current trading activity. Higher volume relative to the average may imply increased interest, while lower volume might suggest a lack of conviction or reduced market participation.
    • I don't know but it looks like a really awesome service Because I have come across all sorts of mixers in my work  
×
×
  • Create New...