We take a look around the world’s markets and analyse the patterns we’ve seen for 18th February. Watch out for the bears!
Shanghai Stock Exchange
Are you losing money? Or do you fear losing opportunity to jump in the market? Currently people are seeking bargains in the Asian market this week. We are seeing everything bought but is it truly the start of new bulls leg? Possibly not yet.
On Thursday China released an inflation report of 1.8% YOY and this number still below the expected 1.9% even though it was already boosted by the Chinese New Year.
Shanghai composite closed down 4.49 point to 2,862.
Japan Exchange Group Tokyo
It only took 3 weeks for the bear to take out the trend line, meaning the outlook is not really good if a bull is unable to bring the Nikkei above trend line.
We see this week’s bullish movement only part of a bear routine to take profit before more selling pressures come to the fore.
The Nikkei closed at 16,205 on Thursday, up 369 points or 2.28%.
Also of note is that Japan’s January export and import showed an extreme decline of 12.9% and 18% respectively. Export decline contributed by a 17.5% dive in exports to China.
London Stock Exchange Group
Despite huge winners in the Asian session, the FTSE fell 1% toward 5,971 which ended the bull’s reign in last four session.
Most commodity shares retreated after gaining for several days.
The main headline in the UK is the possible ‘Brexit’ from the EU. Talk show no progress so far however. Cameron is expected to continue his talks on Friday.
Regardless of Britain leaving the EU coalition or staying within it – both will result in a better position for Britain to protect themselves from financial regulation which have previosuly burdened them.
New York Stock Exchange
After moving up for 3 days, on Thursday the Dow close down 40.40 point at 16,413.
Wednesday’s FOMC meeting tore apart the Fed’s confidence towards the four interest rate hikes planned for this year.
There has been concern shown to more evidence that inflation is rising before another hikes which essentially means for the market view that there will be no rate hike next month.
While it really hurt the dollar, we saw temporary recovery for dixie, but it won’t be too long before it drops once again.
And despite the Dow showing (an as yet unconfirmed bullish pattern), the Nasdaq doesn’t show a strong pattern, the low getting lower and the high getting lower means one thing, a downtrend. A close above 4,350 will turn the table for the short term.
The current rally might end up a short lived one.
Last week we had a major break in Nikkei (driven by Yen), a break in the USD after uncertainty in Fed ambition to reach their 2% inflation target this year.
Prices currently sit under important levels for several indices, if they cannot move above the level, the bear may well come and hammer the markets more.