Breaking News
Get 40% Off 0
Is NVDA a 🟢 buy or 🔴 sell? Unlock Now

Technically Speaking For October 9

By Hale StewartETFsOct 10, 2018 12:30AM ET
www.investing.com/analysis/technically-speaking-for-october-9-200347740
Technically Speaking For October 9
By Hale Stewart   |  Oct 10, 2018 12:30AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
US2000
+1.30%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
QQQ
+0.20%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
IJH
+0.35%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
IWM
+1.34%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
IWC
+1.87%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Summary

  • The IMF is still forecasting solid growth, but downside risks have increased.
  • Chinese-US relations have soured of late; China is pumping money into its economy.
  • The markets are trying to bottom around the 200-day EMAs.

The International Monetary Fund released their latest global economic forecasts yesterday. Although the tone was generally positive, it observed that two risks had developed. The first one is an increased difficulty for emerging markets that were exposed to the rising dollar. The report specifically noted that Turkey, Argentina, and South Africa had this problem. The IMF also noted that this event was so far contained to the relevant countries. The second risk was (unsurprisingly) increased trade riffs caused by Trump’s implementation of tariffs on key U.S. trading partners. Sentiment reports have registered an uptick in concern on behalf of policymakers as a result of the rising wave of protectionism. This could lead to decreased or delayed spending plans on the part of businesses.

Sino–American relations are deteriorating. The U.S. Secretary of State and his Chinese counterpart recently traded public barbs. Recent accusations of election interference voiced by President Trump and Vice President Pence exacerbated tensions. Now, China is demanding that the U.S. specifically designate who has authority to negotiate on its behalf. Military tensions are also rising, with the U.S. sanctioning a Chinese company for its dealings with a Russian supplier and U.S. and Chinese warships sailing in increasing proximity in the South China Sea. Should this situation continue unaddressed, it is only a matter of time before something really stupid happens.

And speaking of China, the Chinese government has signaled it is pumping $175 billion into its economy:

On Sunday, Beijing went one step further.

The People’s Bank of China, the central bank, pulled a financial lever that will effectively pump $175 billion into the economy. The government is aiming to help small and midsize businesses in particular, which have had trouble obtaining loans and face other rising pressures.

So far, the official statistics are still pretty solid: GDP growth at 6.7%, inflation at 2.3%, unemployment below 4%, retail sales are 9% Y/Y, and industrial production is 6.1% Y/Y. It's more than likely that the government is privy to some concerning non-public information. It's also likely that they are doing this preemptively. And, they have plenty of additional fiscal ammunition if they want to apply it. This does, however, signal that the economy might be in worse shape than thought.

Yesterday, the markets looked like they were trying to form a bottom after last week's sell-off. Let's see how we did:

Intraday
Intraday

It could be a whole lot better. The Invesco QQQ Trust Series 1 (NASDAQ:QQQ) were the best performer; they were only up .26%. The OEF was up marginally. Everybody else was down. Worst still, the iShares Micro-Cap (NYSE:IWC), iShares Russell 2000 (NYSE:IWM), and iShares S&P Midcap 400 (NYSE:IJH) were all lower. On the plus side, they weren't down that much.

The charts are actually pretty decent, however.

IWC Daily Chart
IWC Daily Chart

The micro-caps are clustering around the 200-day EMA and the last two days they've printed weak bearish bars. It looks like they really want to use the 200-day EMA as technical support.

IJH Daily Chart
IJH Daily Chart

The IJHs continue to head lower but are still above the 200-day EMA. Like the IWCs, it looks like they are targeting the 200-day EMA.

IWM Daily Chart
IWM Daily Chart

The same story with the IWMs.

All in all, we're actually not in bad shape. The key going forward is if the 200-day EMAs hold as support. That's what we'll need to keep our eye on.

Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Original post

Technically Speaking For October 9
 

Related Articles

TrackInsight
The Resurgence of Fixed Income ETFs By TrackInsight - Feb 22, 2024

Meta-description: Explore the remarkable recovery of fixed income ETFs in 2023, highlighting growth, market impact, and future prospects in the wake of a challenging year. The 2024...

Technically Speaking For October 9

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email