Increasing tensions between US and China

Increasing tensions between US and China

17 August 2020

The US-China relations remains in focus. This weekend's scheduled meeting was canceled due to "conflict in the calendars". Considering that it was the world's two superpowers that would meet, we have a hard time believing that someone double-booked the meetings and canceled this particular meeting, so it is again a signal that the talks are frosty.

Still nobody wants meetings where nothing can be decided because it only creates disappointments in the system. President Trump's demand that TikTok sell its US operations for security reasons is, of course, a red veil for China. Another is that the United States will go ahead and complete a sale of the American fighter plane F16 to Taiwan.

However, the Central Bank of China is pushing in new liquidity. Friday´s trading was a not very happy but the trend to buy things that have fallen behind in the upswing continues. This again benefits the Dow Jones and Russell 2000 ahead of the Nasdaq and S&P 500.

The S&P 500 is traded just below the all-time high, so it would be almost strange if this level could not be taken out. The trend Is still strong upwards and there are no sell signals in the market. However, the number of warning signals is increasing. First, the USD may have bottomed out. In addition, the market for junk bonds does not follow up with the S&P 500. This indicates that the risk appetite in the market is beginning to decline.

Nasdaq did not manage to break above previous its top but both EMA9 as well as MA20 is upwards sloping meaning that the short-term trend is still positive. However, momentum is fading shown by a slightly downward sloping MACD. A phase of consolidation may be possible as the market is waiting for another trigger that can push the index to new highs.

The Tesla share has broken up from a bullish flag formation. These typically tend to be followed by a continued rally. However, there are two obvious warning signals in this case. First, MACD is clearly falling indicating a negative momentum. Secondly, Friday’s trading ended up with a bearish hanging man-doji. The first level on the downside is made up by EMA9 at 1530:

Swedish OMXS30 index fell relatively sharply on Friday but managed to close at MA20. Momentum has for some time not been convincing illustrated by a falling MACD and a horizontal trending EMA9 and MA20. In case of a break to the downside, below MA20, the next support level can be found around 1 725:

Nordea is lagging as the share has tested Fibonacci 61,8 three times without managing to break up. Now the share is testing the upwards sloping trendline, close to MA200 and Fibonacci 50. A break to the downside below these levels and the next support level can be found at MA100 currently trading around SEK 63:

The German DAX index is also struggling, which is illustrated by a falling MACD. Again, EMA9 and MA20 is trading sideways. On the downside, EMA9 and MA20 serves as the first two support levels followed by MA50 right above the 12 600-level:

Bitcoin has been strong during the summer and is still trading above EMA9 and MA20. Note how momentum is fading as MACD has generated a weak sell signal. A break below MA20 at 11 526 calls for further downside to the psychologically important 11 000-level. The next support is made up by MA50 currently trading at 10 220:

The Gold price has rallied with some help from a weaker USD. However, last week was tough for gold. MACD has generated a weak sell signal and the metal is under pressure by a sloping EMA9. A break below Fibonacci 23,6 and the 1 000-level calls for further downside to levels around 1 840 where MA50 and Fibonacci 38.2 meet up:

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04/12/2020 21:52:43

 

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