U.S. indices closed lower on Thursday, 26 August 2021, to end a five-session winning streak and pull back from an all-time high. The market was worried over the prospects of less accommodative monetary policy compounded with concerns over the crisis in Afghanistan. The Jackson Hole Symposium will be held today.
The Dow Jones Industrial Average fell by 0.54%, while the S&P 500 and the Nasdaq Composite declined about 0.6% as well. The three major U.S. indices finished lower, while the S&P 500 and the Nasdaq Composite broke six-day win streaks.
The selling momentum intensified, which helps strengthen risk aversion, after Dallas Fed president Robert Kaplan made a hawkish comment, and after explosions at Kabul airport in Afghanistan. Kaplan believes that the progress of the economic recovery proves that there is an opportunity for the Fed to begin to dial back on asset purchases in October or soon after. Currently, Kaplan is not a voting member of the Federal Open Market Committee (FOMC).
Data shows that the U.S. economy grew slightly faster in the second quarter than initially estimated, and the number of people seeking unemployment benefits rose early last week.
The above chart shows the five-wave structure formed by the Dow on the left side as predicted. Today, pay attention to the 35346 line. If the Dow runs below the 35346 line, it belongs to the short position of the strong area.
Then, focus on whether the Dow is able to break above the 35166 line. Once it falls below the 35166 line, it becomes a deep pullback. At that time, pay attention to the support of the 34990 and 34724 positions.
However, if the Dow manages to climb above the 35346 line again, it will enter the strong support area. Then, it is possible to test the suppression strength of the 35494 line again. Once the Dow breaks through the range of 35494, it might have a chance to hit the record highs again.
Hong Kong Stocks
The Hang Seng Index fell 278 points to finish at 25,415, with a daily turnover of 138.576 billion yuan in the big market. Under China’s blue chip, Tencent fell by 0.6% to 471.8 yuan, with 8.182 billion yuan in transactions. The second largest deal was Xiaomi, which rose first and then fell after the performance, closing down 3.6% at 24.45 yuan. Mengniu Dairy’s interim results beat expectations, up by 3.5%, the best performing blue chip of the day.
HK50 is focusing on the 25816 line today. If HK50 rises to the top range of 25816, it will open up further upward revision. At that time, pay attention to the suppression strength of the two positions of 26535 and 26951. If HK50 runs below the 25816 line, divert your attention to the support of the 25160 position.
FTSE China A50 Index
On A50, focus on the breakthrough range from 14669 to 15298 at the bottom. If it breaks above the 15298 line, it will open up further upward revision, then pay attention to the suppression strength of the 15612 line. If it falls below the 14669 line, it will open up further downward revision. At that time, shift your focus to the support of the 14315 line.
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