SG SESSION (Short Term Uptrend Channel, Testing Horizontal Support)
The Straits Times Index (STI) retraces a further -1% (-24.9 points) during the week. As highlighted last week, the correction is playing out the weakness highlighted within the indicators, 1) Bearish Divergence against its MACD Histogram, 2) MACD Bearish Crossover 3) Double Top RSI breakdown. At the current junction, STI is sitting at its horizontal support of 2,800 with a Doji Star Candlestick Pattern, signifying potential reversal for the impending session.
The levels to watch for the week are 2,900 – 2,940 resistance range, and support at to watch for the intact of this uptrending momentum is 2,800 immediate support.
US SESSION (Significant Bearish Divergence Observed)
The S&P500 rallied +1.8% (+36.84points), resuming its momentum in this two months of rally. At current junction, S&P500’s weakness reflected in the indicators 1) Bearish Divergence still persisting in MACD Histogram, 2) Potential MACD Bearish Crossover 3) Potential RSI Double Top Brekadown 4) Volume Divergence is still persisting within its indicators. At current junction, S&P500 is always reaching its major resistance level at 2,080.
The levels to watch for the week is 2,080 immediate major horizontal resistance level. The immediate major support zone to watch is 2,018 level for the short term uptrending momentum to remain intact.
3 things to watch on the economic calendar this week
1. FOMC meeting minutes (Wednesday)
The Fed surprised markets following the conclusion of its policy meeting on March 16 by cutting its rate hike projection for this year to two from the four it had previously projected, citing the potential impact from weaker global growth on the U.S. economy.
2. Fed speakers
Market players will be paying attention to a handful of FOMC member speeches during the week to further judge the balance of opinion among policymakers on the prospect of further rate hikes.
On Monday, Boston Fed President Eric Rosengren, Minneapolis Fed President Neel Kashkari and Dallas Fed President Rob Kaplan are scheduled to speak throughout the day.
On Wednesday, Cleveland Fed President Loretta Mester, St. Louis Fed President James Bullard and Dallas Fed President Rob Kaplan are on tap.
Fed Chair Yellen is scheduled to participate in a panel discussion at the International House, in New York, on Thursday.
Finally, Kansas City Fed President Esther George is due to speak about the U.S. economy, in Nebraska, on Friday.
3. U.S. ISM non-manufacturing PMI survey (Tuesday)
The gauge is expected to rise 0.6 points to 54.0, which would be a three-month high.