US Stock market Technical Analysis October 11, 2018

Rate outlook cripple the market

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Wednesday has been a grim session for traders and investors as U.S major indices down sharply. Dow Jones Industrial Averages down 831.83 points (-3.15%), Nasdaq down 315.97 points (-4.08%), S&P 500 down 94.66 points (-3.2(%). The situation expected to continue today as DJIA futures down almost 300 points.

Today, President Trump deemed The Fed as “Crazy” and “Loco” after the sell-off in the equity market. Investors and traders argued that recent sell-off caused by a sudden jump in Long-term interest-rate. 10-year treasury note recorded yield of 3.26%. At the same time, analysts think U.S economy still going strong and this correction is a normal situation.

Asian & European Stock market

Asian stock market nose-dived. Nikkei down 915.18 points (-3.89%) to 22,590.86, China stock market down 142.38 points (-5.22%) to 2,583.46, and Australia ASX 200 down 166.00 points (-2.74%) to 5,883.80. European stock market also follows lower. DAX Germany down 1.61%, UK FTSE down 1.89%, Euro STOXX600 down 2.00%.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA sharply lower in the previous day, broke the bullish channel established since July this year. The index expected to continue its downward movement and reach the daily SMA 200 before any bounce could happen. As the sell-off has strong momentum, it is better for traders to stay sideline for now and wait for reversal or continuation pattern.

Other Watchlist

 

LMT, CSCO – wait until the decline reaches daily SMA 200 and there is reaction near the support.

 

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