Stimulus hope propel the market, but until when?

U.S stock market jumped in the previous trading day on the expectation that the Fed and other major central banks will throw in stimulus to boost the economy. G7 members also will meet this week and expected to start coordinating responses to the current coronavirus situation.

The bullish effort in the stock market is great but we think it might tank again depend on the coronavirus development. As long as the infection rate and death tolls increase then nothing positive to expect yet to the economy.

Asian & European Stock market

The Asian stock market mixed. Japan’s stock market down 261.35 points (-1.22%) to 21,082.73, China stock market up 21.97 points (+0.74%) to 2,992.90 and Australia ASX 200 up 44.20 points (+0.69%) to 6,435.70. The European stock market edge higher. DAX Germany up 2.64%, UK FTSE up 2.27%, Euro STOXX600 up 2.73%

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA reversed its downward direction and started a massive bullish correction. However, the current upward movement is a temporary reaction only and might stop near the daily SMA 200. The market mostly optimistic as stimulus should be on the card. We suggest traders be cautious and stay in cash or only enter positions in a strong company only.

Lowes Companies (LOW)

LOW dropped to the daily SMA 200 and closed below it. The share prices managed to climb and close above the average again yesterday. It looks bullish but traders might want to become extremely careful when taking long positions. Short positions might be the best options traders could take when the global market starts moving lower again.