A big warning sign is occupying the minds of investors as a new wave of the virus in China emerges. City-wide testing in Shanghai and Beijing have been going on for the past couple days. Investors fear another potential lockdown in these cities. This is not just impacting the Chinese economy but global indices as well.
Global Indices Plunge
SPX500, NAS100, UK100, and NI225 are all down today while NAS leads in the losses and is down 2.68% at the time of writing this. If China were to announce another lockdown, stock markets around the world would continue to tumble. Another problem facing US stocks is a mixed earnings season. This factor paired with a shift in money to bonds adds to the overall bearishness.
Very little open interest on the COT side also suggests that we are not yet ready to see stock market gains for the time being. What's happening now is a myriad of headwinds in the way, and the market can't really cope with everything going on. An alarming rise in uncertainty usually results in sporadic behavior and eventual sell-offs. It looks like the bearish sentiment will likely continue until we get past quarterly earnings and concerns in China ease.
Setups To Watch
SPX500 fails to shift in direction after yesterday's bullish hammer candle. It looks like price will eventually fall to support around $4181 where there is a double bottom on the 1D. However, if by the end of the day the index shows another day of rejecting the lows, we might see a higher low established.
NAS100 is in the same boat except yesterday's gains were erased just from this morning's performance. What we could see is a rebound at the double bottom as rejection from the lows would be bullish on a technical perspective. However, if price cannot maintain above this level, we could see a fall to the $12,600s.
This is very much looking like a short setup on the 1D. Price has already crossed under the 50 DMA and heading lower towards the 200 DMA. Price action suggests that the index will hit the 200 before it finds any clear support. Lower highs also suggest that price is not done with its bearish move.
Smart Money Tracker
See where big money is flowing with the A1 Edgefinder's smart money tracker! With one click, see where the biggest money flows are entering and exiting through COT data.
Today at 2:00 pm EST, the Fed will announce their latest interest rate decision. Estimates suggest a smaller hike of 25 basis points this time around. Here are some things to consider before the FOMC decision later today: The Fed has struggled to tighten their grip on inflation without causing too much disturbance in the […]
With the holiday season lingering on and a new year on the cusp of arrival, traders may glance at the calendar and notice there is not much economic news to anticipate on Friday to cap off a light week. In situations like these where there can be lulls in bullish and bearish momentum due to […]
As the fiscal year comes to a close, consumers will likely finish shopping for the holidays, and traders and investors will get some respite thanks to a long weekend due to bank holidays around the world. While concerns about further stock market selloffs may be lingering in the minds of some, a promising set of […]
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here