US Stock market Technical Analysis January 16, 2020

Corporate earnings, tax cut, and trade deal to influence the market

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U.S stock market set to open higher today following the positivism after phase one trade deal signing yesterday. In the agreement, China set to purchase more than $200 billion of U.S goods in exchange for tariffs exemption for several products. Trade talks will continue and it might talk about the entire exemption of tariff.

Yesterday, Larry Kudlow mentioned the White House plan for tax-cut this year. This news should give boost to the stock market. Morgan Stanley (NYSE: MS), CSX Corp (NASDAQ: CSX), Charles Schwab Corp (NYSE: SCHW) set to report earnings today.

Asian & European Stock market

The Asian stock market mixed today. Japan’s stock market up 16.55 points (+0.07%) to 23,933.13, China stock market down 15.96 point (-0.52%) to 3,074.08, and Australia ASX 200 up 47.00 points (+0.67%) to 7,041.80. The European stock market mostly lower. DAX Germany down 0.19%, UK FTSE down 0.43%, Euro STOXX600 down 0.08%

Technical Analysis

Dow Jones Industrial Average (INDU)

The signing of phase one trade deal between the U.S and China boosted the DJIA index yesterday. At the current time, DJIA futures gain more than 70 points which suggests further upside in the DJIA today. Similar to the previous analysis, it is better to stick with long positions in equity and wait until further evidence shows bearish reversal has happened.

Target Corp (TGT)

TGT gapped lower below the daily SMA 50. The share prices tested the daily SMA 100 and the horizontal line yesterday. If TGT will start a bounce then it might start at the current time. Otherwise, TGT can continue lower and test the level around $110.00.

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