|Day's range||7,388.3750 - 7,441.4189|
|52-week range||5,785.2202 - 7,511.3901|
The U.S. Dollar is trading slightly lower against a basket of currencies on Tuesday. On Monday, Bostic was more responsible for the acceleration in the intraday downtrend in the dollar than President Trump.
Based on the early price action, a bullish tone could develop on a sustained move over 7411.00 and a bearish tone could develop on a sustained move under a downtrending Gann angle at 7377.50.
The Trump administration has imposed tariffs on billions of dollars of Chinese goods and proposed tariffs of much higher magnitude as well. At one point in time, President Trump threatened to impose tariffs on all Chinese imports. Along with the China-specific tariffs, we also have the Section 232 tariffs that are more broad-based and cover the entire world with a few exemptions.
Based on the early trade, the direction of the September E-mini NASDAQ-100 Index is likely to be determined by trader reaction to a pair of Gann angles at 7406.75 and 7393.50.
It’s a big week ahead for the markets and things could unravel should U.S China trade talks disappoint and FED Chair Powell raise concerns…
One positive that can be taken from last week’s events is that sometimes it is necessary for an event to come along and drive stocks back into value areas. Too often, bull markets sputter along near all-time highs because of limited buying. However, profit-taking and position-paring is often necessary to bring prices into areas that are attractive to new buyers. It’s this new capital that then drives stocks to new highs.
Based on the early trade, the direction of the September E-mini NASDAQ-100 Index is likely to be determined by trader reaction to the uptrending Gann angle at 7390.75. Basically, look for the index to weaken under 7390.75 and strengthen over 7411.00.
U.S. futures contracts are drifting lower during the pre-market session early Friday. The selling pressure is being fueled by a drop in Nvidia stock. Shares of the company fell by 6 percent on Thursday after the company reported better-than-expected earnings and lower-than-expected revenue guidance.
US equity markets closed in the red on August 15 with the PowerShares QQQ ETF (QQQ) down 1.2%. On a YTD (year-to-date) basis, QQQ has risen 15.5% and looks pretty solid. The so-called “FAANG” stocks—Facebook (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Google (GOOG)—have delivered strong YTD returns with the exception of Facebook. The FAANG stocks came under pressure yesterday, but it wasn’t really a panic situation.
There’s a crisis building in emerging market currencies. The Turkish lira, Iranian rial, and Indian rupee have fallen to an all-time low against the US dollar. The Russian ruble also fell to a two-year low against the US dollar. In Iran’s case, US sanctions and an overall economic slowdown took a toll on the currency. President Trump’s tweet about doubling the Section 232 tariffs on Turkish steel and aluminum products added fire to the already plunging Turkish lira.
On Wednesday morning, global markets are again under pressure on new episodes of U.S. trade conflicts. Again, at the epicenter of the fall are the Asian exchanges as MSCI lost 0.8% and Hong Kong’s Hang Seng fell by 1%. US Futures trade lower.
Investors are playing a cat-and-mouse game with the Turkish Lira because no one is certain how the situation will play out over the short-term.
Based on the current price, the direction of the September E-mini NASDAQ-100 Index into the close is likely to be determined by trader reaction to the pivot at 7442.00.
Markets can get a respite from the rally today or for a few days at best, but the worst is still ahead as we could see the sale-off on stock and bonds markets. The Turkish lira has stabilized near 6.5 per dollar after the country’s central bank had announced the measures to maintain liquidity.
China posted weaker-than-expected economic numbers across the board in data just released. Fixed Income Investment came in at 5.5%, down from 6.0% and below a 6.0% forecast. Industrial Production was 6.0%, below the 6.3% estimate, but matching the previous month. Retail Sales fell to 8.8% from 9.0%, also coming in under the 9.2% forecast. Finally, the Unemployment Rate rose to 5.1% from 4.8%.
Based on the short-term price action, the direction of the September E-mini NASDAQ-100 Index futures contract this week is likely to be determined by trader reaction to the short-term pivot at 7348.25.
Weighing on equities were worries of financial and currency turmoil in Turkey as well as continued tariff retaliation between the United States and China. U.S. government debt yields plunged on Friday as global credit contagion fears surrounding Turkey encouraged asset managers to aggressively move money into relatively safer assets. Consumer prices continued to rise in July, indicating a gradual increase in inflation pressures and suggesting further interest rate hikes from the Federal Reserve. The Turkish Lira collapsed to an all-time low against the U.S. Dollar Friday even as Turkey’s leader, President Recep Erdogan downplayed the concerns, telling Turks “we have our God.”
Based on the early trade, the direction of the September E-mini NASDAQ-100 Index will be determined by trader reaction to a steep uptrending Gann angle at 7454.75 and a downtrending Gann angle at 7434.00.
Financial markets rise on positive sentiments about earnings and China’s fiscal stimulus. That pushed down the demand for USD, but more likely it is just a step back before the jump.
We’re approaching the end of the second-quarter earnings season, which has yielded mixed results. Among the FAANG stocks, Facebook (FB) and Netflix (NFLX) disappointed, and Apple (AAPL) and Amazon (AMZN) posted better-than-expected results. The broader markets have also been cruising along, with the PowerShares QQQ ETF (QQQ) up 16.7% for the year based on its August 6 closing price.
Based on the early trade, the direction of the September E-mini NASDAQ-100 Index futures contract is likely to be determined by trader reaction to yesterday’s close at 7444.00. Watch the price action and read the order flow at 7444.00 all session. Trader reaction to this level will tell us if the buyers or sellers are in control.
The demand for the dollar provoked by fears of new US sanctions against a number of countries and expanding trade conflict with China. Those concerns pushed the American currency close to the upper edge of the trading range since April.
Economic data is on the quieter side for the week ahead, leaving the markets to focus on the RBA, RBNZ and Trump, trade wars a risk appetite killer.
In U.S. economic news on Friday, the Labor Department said the U.S. economy added 157,000 jobs last month. The ISM Non-Manufacturing PMI report showed activity in the services sector slowed more than expected in July. The U.S. trade deficit widened in June for the first time in four months as exports fell and imports grew. Trade gaps with China, Mexico and Canada all increased. On Friday, China’s Ministry of Commerce said China is preparing to retaliate in the escalating trade war with tariffs on about $60 billion worth of U.S. goods.
Based on the early trade, the direction of the September E-mini NASDAQ-100 Index is likely to be determined by trader reaction to 7391.25 and 7348.25.