[Week #27] June 27th – July 1st Singapore & US Market Outlook

2016Jun-Straits Times-800x600

SG SESSION (Bearish Head and Shoulder Trend Reversal Pattern Breakdown)

The Straits Times Index (STI) corrected a further -1% (-28.03) in last week’s session, extending its losses for the second consecutive week.

As highlighted in the chart above, STI has broken its Bearish Head and Shoulder Trend Reversal Pattern convincingly with high transaction volume, signifying a likelihood to see it trading towards the projected level of 2,610 in the mid term. However, it must be noted that the strong breakdown on Friday is still respecting to its major support at 2,710 level.

For further confirmation of bearishness in STI requires 2,710 major support level to be breached within the week. Any breached of resistance at 2,810 will be a potential change of sentiment to the upside, with all losses on Friday due to Brexit Referendum poll result being erased.

2016Jun-S&P 500-800x600

US SESSION (S&P 500 Negation of Uptrend Channel)

The S&P500 retraces a further -1.6% (-33.81) points during the previous week, extending its losses to the 4th consecutive week.

At the current junction, S&P 500’s exhibition of uptrend channel is negated with Friday’s market breakdown which beaches the higher low support level at 2,050 level. It is likely to see S&P 500 trades within a range of 2,015 to 2,115 levels this week, as the current development of Brexit Referendum poll result is likely to encourage market participants to sit out for the week for further developments, until EU’s leader discussion on Brexit over this Tuesday & Wednesday, and Federal Reserve Chair Janet Yellen’s speech and ECB central bank conference on Wednesday

 

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5 things to watch on the economic calendar this week (an extract and summary from http://www.investing.com/news/economy-news/5-things-to-watch-on-the-economic-calendar-this-week-410655)

 

1. Possible UK credit rating downgrade

Ratings agency Moody’s warned Friday that it may downgrade the U.K.’s credit rating as it lowered the outlook to “negative” from “stable” after the country voted to leave the EU.

Moody’s said the result would herald “a prolonged period of uncertainty”.

Rival ratings agency Standard & Poor’s, the only one of three major ratings agencies that still has a AAA rating on Britain, said Friday the Brexit vote meant the AAA rating was no longer tenable.

 

2. EU leaders to discuss Brexit (Tuesday & Wednesday)

EU leaders are to discuss how they should handle Britain’s decision to leave the bloc. U.K. Prime Minister David Cameron will attend the first day of the summit.

 

3. Janet Yellen speech (Wednesday)

Federal Reserve Chair Janet Yellen is due to speak at an ECB central bank conference in Portugal on Wednesday, with investors looking for indications on how Brexit will alter the outlook for the U.S. economy and the path of interest rates.

Traders have now discounted any chance of a U.S. rate hike this year and federal funds rate futures are even signaling that a rate cut may be on the cards.

 

4. U.S. earnings results 

Nike (NYSE:NKE) is to announce its quarterly earnings results after the close of the U.S. market on Tuesday.

General Mills (NYSE:GIS) and Monsanto (NYSE:MON) are to report their earnings ahead of Wednesday’s U.S. market open. ConAgra Foods (NYSE:CAG), Constellation Brands (NYSE:STZ) and Darden Restaurants (NYSE:DRI) are to report on Thursday.

 

5. Global manufacturing data (Friday)

China, the U.K. and the U.S. are all to release survey data on manufacturing activity on Friday.

 

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