US stock markets closed down sharply overnight as the selloff in Facebook spread to techs and then other sectors. In the background there is also concerns of Trump’s trade war against China. Down dropped -1.35% to 24610.91 and S&P 500 dropped -1.42% to 2712.92. NASDAQ suffered the biggest damage by losing -1.84% to 7344.24. Nikkei opened lower and is down -140 at time of writing. HK HSI is down -0.55%.
Even though DOW managed to pare back some loss towards the end of the session, the break of 24668.83 support now put the bears in control. For the near term, deeper fall is expected to 24217.76, or slightly further to 23.6% retracement of 26616.71 to 23360.29 at 24128.80. Overall, it’s bounded in corrective pattern from 26616.71 and price actions inside this ranging pattern is rather hard to predict. We’ll keep an eye on downside momentum to gauge the chance of a test on 23360.29.
NASDAQ’s fall from last week’s record high at 7637.27 accelerated after taking out 55H EMA firmly. But it’s now trying to draw support from 38.2% retracement of 6630.67 to 7637.27 at 7252.74. Initial support might be seen to bring recovery. But sustained break of 55 H EMA (now at 7445.43) is needed to confirm completion of the fall. Otherwise, based on current momentum, deeper fall is in favor back to 61.8% retracement at 7051.19.
Across the Atlantic, FTSE also tumbled sharply yesterday. But that’s mainly due to Sterling’s sharp rally following news of Brexit transition deal. The break of 7062.13 now confirms resumption of whole fall from 7792.56. FTSE is now set to take on 38.2% retracement of 5499.50 to 7792.56 at 6916.61. Reaction to this medium te4rm fibonacci level could hinge on whether GBP/USD will break above 1.4345 key resistance.
