Jump to content

Another strong showing in Wall Street: DJIA, Hang Seng Index, EUR/JPY


Recommended Posts

Major US indices delivered another strong showing overnight, with growth stocks in the likes of mega cap taking leadership once more.

bg_usd_us_dollar_361541599.jpgSource: Bloomberg
 

 Yeap Jun Rong | Market Strategist, Singapore | Publication date: Friday 27 January 2023 

Market Recap

Major US indices delivered another strong showing overnight (DJIA +0.61%; S&P 500 +1.10%; Nasdaq +1.76%), with growth stocks in the likes of mega cap taking leadership once more. Energy stocks also outperformed overnight (XLE +3.2%), potentially reflecting some market positioning for the release of another quarter of stellar earnings. With that, the Energy Select Sector SPDR Fund is just 1.8% away from delivering a new eight-year high. For the earnings season so far, 25% of S&P 500 companies have released their results and 70% of them have outperformed earnings expectations. Beaten-down market expectations heading into the earnings season seem to have provided a low watermark for outperformance. The S&P 500 is now attempting a bullish crossover between its 50-day and 200-day moving average (MA) for the first time since March last year. For the DJIA, it remains locked in a phase of consolidation since November last year, with a retest of key resistance at the 34,400 level on close watch ahead. Any break above the current consolidation zone may provide conviction of more upside ahead.

 

Chart 1_ Wall Street CashSource: IG Charts

 

The release of stronger-than-expected economic data was initially met with a lacklustre reaction, but equity bulls ultimately retained control into the second half of the trading session. Outperformance in US fourth quarter (4Q) GDP (2.9% versus 2.6% forecast) and US durable goods (5.6% versus 2.5% forecast) points to a more resilient US economy, but pockets of a challenging economic outlook were still presented in the much lower-than-expected consumer spending (2.1% versus 2.9% expected) and falling imports. That may still question the sustainability of recent strength over coming quarters. Recent layoffs in tech companies have also not been showing up in US initial jobless claims thus far, so economic resilience is the near-term takeaway here. Up ahead, the US core PCE price index will be in focus, with current forecast of 4.4% pointing to another moderation of pricing pressures.

Asia Open

Asian stocks look set for a flat to a higher open, with Nikkei -0.09%, ASX +0.33% and KOSPI +0.56% at the time of writing. The Australian market is back online after its holiday break yesterday, while mainland China remains closed until Monday. Nevertheless, signs of positive catch-up performance were presented in the 2.4% surge in Hang Seng Index yesterday. The Nasdaq Golden Dragon China Index closed 3.6% overnight, providing a positive backdrop for the bullish momentum to continue. Based on yesterday’s closing for the Hang Seng Index, a bullish crossover between its 50-day and 200-day MA has been formed for the first time since August 2021. The index remains guided by a rising wedge pattern for now, with the 22,870 level serving as the next line of resistance to overcome. Technical conditions in overbought territory may still call for a buy-on-retracement as the lower-risk trade.

 

Chart 2_HS50Source: IG Charts

 

The economic calendar this morning revealed higher-than-expected reading for Tokyo core consumer price index (4.3% versus 4.2% consensus), pulling further ahead of the Bank of Japan (BoJ)’s 2% target. This seeks to challenge an eventual policy shift for the central bank, although the government’s energy subsidies next month could be tapped on to push back any changes for now. Nevertheless, the JPY found some strength in the higher-than-expected pricing pressures, with USD/JPY still hovering below a key channel trendline resistance at the 130.80 level.

On the watchlist: EUR/JPY facing key test of resistance at upper channel trendline

The EUR/JPY pair has been trading on lower highs and lower lows since October last year, guided by a falling channel pattern to bring about an overall downward bias. Recent up-move has brought the pair to retest a confluence of resistance at the 141.59 level, which was brought on by the upper channel trendline in coincidence with its 50-day MA. Failure to overcome the level could leave the falling channel intact and potentially prompt a move towards the 139.24 level, where a Fibonacci confluence zone resides. The upside surprise in Tokyo’s core CPI has fuelled some expectations for a hawkish policy shift from the BoJ ahead, which translates to a strong showing for JPY this morning. However, that will have to pit against a more risk-on environment being supportive of the EUR. Any break of the upper channel resistance will leave the 142.68 level on watch.

 

Chart 3_EUR/JPYSource: IG Charts

 

Thursday: DJIA +0.61%; S&P 500 +1.10%; Nasdaq +1.76%, DAX +0.34%, FTSE +0.21%

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
      21,594
    • Total Posts
      91,777
    • Total Members
      41,845
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    TWI23
    Joined 20/03/23 09:21
  • Posts

    • DexCom Inc., Elliott Wave Technical Analysis DexCom Inc., (DXCM:NASDAQ): Daily Chart, 20 March 23, DXCM Stock Market Analysis: Looking for an overall long term correction to take place as we could be correcting the entire upmove from 2008.Looking for another leg higher before potential downside resumption. DXCM Elliott Wave Count: Wave (B) of B. DXCM Technical Indicators: Above all averages. DXCM Trading Strategy: We could look for longs with a stop below 104$. TradingLounge Analyst: Alessio Barretta Source : Tradinglounge.com get trial here!   DexCom Inc., DXCM: 4-hour Chart, 20 March 23, DexCom Inc., Elliott Wave Technical Analysis DXCM Stock Market Analysis: Here the three wave move to the upside appears clearer. Looking for sideway continuation as long as we stay above the 200EMA to then resume higher. DXCM Elliott Wave count: Wave (B) of B. DXCM Technical Indicators: In between averages. DXCM Trading Strategy: Looking for sideways continuation in wave (B).Enterwave (B).
    • Commodity Futures Market Technical Analysis Elliott Wave and Trading Strategies Content: US Bond Yields, Dollar DXY, US Gold, Silver, Copper, Lithium, Nickel, Crude Oil, Natural Gas Commodities Market Summary: Commodities are generally moving lower. Trading Strategies: Another buying opportunity may unfold across 2000 for Gold, however we need to wait for the set up, see the video. Video Chapters 00:00  US Gov Bonds 10 Yr Yields 03:58 US Dollar Index DXY  14:04 US Spot Gold 23:47 US Spot Silver 27:52 US Copper / Lithium / Nickel  38:24 Crude Oil  42:19 Natural Gas 44:38 Thanks for watching! Analyst Peter Mathers TradingLounge™ Australian Financial Services Licence - AFSL 317817 Source: tradinglounge com  Level Up - Test the Trial Service!    
    • Elliott Wave Analysis TradingLounge Daily Chart, 19 March 23, Theta Token/U.S.dollar(THETAUSD) THETAUSD Elliott Wave Technical Analysis Function: Follow trend Mode: Motive Structure: Impulse Position: Wave III Direction Next higher Degrees: wave (I) of Impulse Wave Cancel invalid Level: 0.706 Details: Wave II is likely to end at the level of 0.85 and a five-wave rise from this level will confirm it. Theta Token/U.S.dollar(THETAUSD)Trading Strategy: Theta Token price has recovered well from the 0.850 level but the price is still in a downtrend as it is below the MA200 line, but even then we have completed the second wave retracement and the retracement of the 0.850 level. A five-wave rally confirms this idea, making the price likely to trade above 1.302 and potentially leading to 1.784. Theta Token/U.S.dollar(THETAUSD)Technical Indicators: The price is below the MA200 indicating a DownTrend. The wave oscillators below Zero-Line momentum are bearish. TradingLounge Analyst: Kittiampon Somboonsod, CEWA Source : TradTradinglounge.com get trial here! Elliott Wave Analysis TradingLounge 4H Chart, 19 March 23, Theta Token/U.S.dollar(THETAUSD) THETAUSD Elliott Wave Technical Analysis Function: Follow trend Mode: Motive Structure: Impulse Position: Wave III Direction Next higher Degrees: wave (I) of Impulse Wave Cancel invalid Level: 0.706 Details: Wave II is likely to end at the level of 0.85 and a five-wave rise from this level will confirm it. Theta Token/U.S.dollar(THETAUSD)Trading Strategy: Theta Token Well recovered from the level of 0.850 and managed to cross the MA200 line, so the trend has a chance to turn bullish again. We also predicted the end of the second wave reversal and the five-wave rise confirming this idea. The price is likely to trade above 1.302 and could lead to 1.784. Theta Token/U.S.dollar(THETAUSD)Technical Indicators: The price is above the MA200 indicating an UpTrend. The wave oscillators above Zero-Line momentum are bullish.
×
×
  • Create New...