Markets ease before G-20 meeting .... Volatile Rand

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Derek  25 Jun 2019

Good Morning,

Markets are correcting ahead of the Trump-Xi meeting at G-20.

I was surprised that the markets did not correct more as we are in overbought territory? The outcome of the talks can have a big affect on the next move.

The NASDAQ corrected the most to close on my trend line. Notice that everything is in place for a correction, but the outcome of the Trump-Xi meeting is more important.
Technical factors:
1 We are in overbought territory.
2 Doji the previous day
3 FrontRunner broke down
4 Red MACD bars
5 The trend and EMA8 lines are not broken yet.

A share to watch is Colgate-Palmolive. If it breaks out of this flag, the next move can be the same distance as the length of the flag pole. Notice that it touched top resistance 7 times!

Incyte Corporation could not break its resistance and an engulfing bear candle was formed together with a FrontRunner break and MACD red bar in overbought territory.

Walt Disney tried 4 times to break its resistance before giving up to close below the EMA8 line.

JSE Technical:
The volatile Rand had a big influence on the JSE. This time it weakened to boost all the Rand hedges and made all the financials correct.

Standard Bank could not break top resistance and managed to close above the EMA8 line. Notice the last 3 candles against resistance: doji, hammer and engulfing bear candle!

BHP Group is trying to break top resistance again with the help of the Rand. It was completely overbought at the previous attempt and then made a J-curve before the next attempt. It needs to stay 4 days above the resistance line to be classified as a true break.

As you can see on the graphs of the U.S. shares, this is not the time to be brave. Your guess is as good as mine what will happen at the G-20 meeting .... and do not forget the unpredictable Trump factor!

Enjoy your day
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