Escalated Trade War .... Further downgrades by Fitch

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Derek  5 Aug 2019

Good Morning,

International:
Stocks slide to lowest level in a month after Trump escalates trade war. Trump's latest tweets revived Global Growth Jitters. Asian stocks are tumbling futher this morning.

The 50 day moving average (dark blue line) acted as support for the S&P500, but no sign of any turn yet.



The DAX continued its correction with a GAP down. Unfortunately we will only learn later if this is a continuation or exhaustion gap. While Trump is throwing his toys out of his cot for not getting his way in the trade negotiations, my guess is that this is a continuation gap.



Fluor Corporation fell to a 15 year low after another surprise loss. I highlighted the 3 major gaps on this chart. Also to notice is where the trend factor turned red to warn you to stay away.



Only a handful of shares are managing to move against the correction trend. American Tower Corp is one of them.




JSE Technical:
Fitch also downgraded the Banking Sector to an outlook of negative. This is due to their exposure to Government Debt. The weaker Rand is also not helping the Rand Hedges as investors are selling JSE shares for better investments elsewhere.

As you can see, the Banking Sector is still heading down, but moving into oversold territory.



I showed the pattern before where a share drops, then moves sideways for a while between 2 resistance and then breaks the bottom support to continue the drop. I do not have a name for this pattern? PSG is making a perfect example of this.



We are dealing with abnormal circumstances on the JSE and World Markets. Extreme caution is recommended as you do not know what tweet comes next!

Enjoy your day.
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