Risk aversion re-intensifies again in US session on trade war concerns. At the time of writing, DOW is down -1.46%. NASDAQ is down -1.75% and S&P 500 is down -1.44%. Yesterday, it appeared that DOW had drawn strong support from 55 day EMA and rebounded. But technically outlook turns rather bad with today’s steep decline.
In the background, bearish divergence condition is already seen in daily MACD. 26696.96 is reasonably close to historical high at 26951.81, It’s an ideal timing for a near term reversal. A close below 55 day EMA (now at 26013) today, and sustained trading below there ahead, will suggest that rise from 21712.53 has completed. And even in the relatively bullish scenario, DOW should at least have a test on 38.2% retracement of 21712.53 to 26695.96 at 24792.28 ahead.
Technical developments in 10-year yield also turns bad again after some false dawns. Rejection by 55 day EMA again dampened the case of bullish reversal. Meanwhile, 2.463 support is back in focus. A close below this level today should confirm completion of the corrective recovery from 2.356. And larger down trend would then be ready to resume through 2.356 low.
