Global markets are on high alert as a new surge in coronavirus infections take hold of Asian countries which could see market corrections across the board despite the WS30 record close.
The CNN's Fear & Greed Index has seen market fear increase to levels last seen 1 month ago.
The new surge in infections can be attributed to lower levels of vaccinations in Asian countries compared to the U.S which seems to be firing on all cylinders.
U.S economic data has improved across the board led by the labour market which has traders expecting the Fed to start tapering its asset purchases in the year. “But the move has been well flagged, meaning a repeat of the so-called "taper tantrum" of 2013 that shook markets when the Fed began putting the brakes on its quantitative easing program, is unlikely.”- Ray Farris (chief investment officer South Asia, Credit Suisse.)
Here is what’s expected this week:
The Wall Street 30 Technical Analysis
The Wall Street 30 Index (WS30) pushed to new all-time highs and is currently trading at our 35183 resistance level mentioned in our previous WS30 note. We might see a short-term correction from here depending on the current fundamental factors from the Federal Reserve.
Our price levels remain unchanged and will focus on the 34671-support level for the possible correction and the 36030 possible long term price level.
- The WS30 price action is consolidating at the 35183-resistance level which is now a major level to watch this week along with the 34671-support level.
- The 50-day SMA (blue line) has been acting as support to the price action on the 4H chart over the last week.
- The Relative Strength Index (RSI) is turning lower from overbought levels on the 4H chart.
Chart Source: Wall Street 4H Timeframe - GT247 MT5 Trading Platform
Trading Term of the day:
CNN's Fear & Greed Index tracks seven indicators of investor sentiment across market momentum, Put and Call Options, Junk Bonds, Market volatility, Safe Haven Demand, Stock Price Depth and Stock Price Strength.
Take note: The outlook and levels might change as this outlook is released during the current days (Wednesday the 11th of August 2021) U.S Market open.
Sources – MetaTrader5, Reuters, CNN Business.
Barry Dumas | Market Analyst at GT247.com
Barry has 12 years of experience in the financial markets. He enjoys educating clients on trading / investing and providing punchy technical analysis on securities. He currently holds a Wealth Management qualification and is studying towards becoming a Chartered Market Technician® (CMT) designation holder.
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