Low bar for the bull

The outlook for the market has been strong at the beginning of this year, but the situation turned sour after Dow logged record high at the end of January. Correction happen, rising rates clogged the bull, volatility increased, the fear of trade heighten. All of the recent sentiment pointed to the negative side even though the Fed stay hawkish on the latest testimony.

This week will mark the first interest-rate decision for The Fed Jerome Powell. The market has shifted from three interest-rate expectation to four this year which mean less rate-hike will welcome the bull to the stock market.

It is easy for the bull to produce a rally as the bar is really low especially with the combination of negative sentiment. The Fed might switch to an accommodative stance which will help boost the sentiment.

Asian & European Stock market

Asian stock market closed mixed today. Nikkei down 99.93 points (-0.47%) to 21,380.97, Shang Hai Composite up 11.21 points (+0.34%) to 3,290.46 and Australia ASX 200 down 23.00 points (-0.39%) to 5,936.40. European stock market notched gain before The Fed meeting. DAX Germany up 0.32%, FTSE UK up 0.42%, and Euro STOXX 600 up 0.29%.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA seems broke out from the triangle pattern with downside direction. The index might continue lower, but traders must consider the daily SMA 100 which near the current level. If the bull could not push the index higher this week, then we could see the index fall toward daily SMA 200.

Starbucks Corp (SBUX)

SBUX share prices returned above daily SMA 200 and corrected after it tested $60.00 resistance. The bull has shown some interest to push the price higher. Will it continue to hold the share prices above the cluster of averages? Traders could look for long position near the daily SMA 50,100&200.

U.S Steel Group (X)

X is at an interesting level where there is previous resistance present. The share prices struggling near $40.00 and the daily SMA 50. A bounce from current level could lead to the continuation of the bullish trend, but a rejection from the resistances will lead the share prices toward SMA 100.

Other Watchlists

MON – The share prices sliced through daily SMA 200. The averages will turn into resistance and hold the appreciation of price. Traders could look for short position near the averages.