US Interference with China: HK Bill Retaliation
China has released official statements telling the Trump Administration that they will retaliate if Trumps passes the bill. However, from Trump’s perspective, he has to sign it as well because congressional pressure. In any case, even if Trump ignores the submission, the HK bill will also be passed after a certain period of time.
What this means to the trade war is that US-China will now have a reason to not come up with a convincing phase one deal in December. I believe that the rising tensions will legitimate a flat December in most markets and that is how STI will fare as well.
STI – Updated Daily Chart
Daily Chart shows that STI did not break MA resistance for the past week and has reached the lower limit of the bollinger band. Currently 3182 resistance is still holding steady. However, with more bad news looming from the trade discussions, there might be a further down trend. Take a look at the weekly chart for a wider perspective.
The 9 and 20 weeks MA is currently holding STI and therefore there might be a rebound in the coming week. Furthermore with Daily charts hitting the lower bands of the Bollinger, there might be some room for potential upside. However, due to poor market outlook in general between US and China, do exercise some caution in the near term.
Author Calls
- STI rallying towards 3280 (Update from 3360- drop of 80 basis points)
- 3220 broke and STI might test it again in the coming week.
- HK Bill signed creates room for potential volatility in the markets
- Q3 reporting is over and STI will continue to lay low for the time being
- Instead of pumping money back into the market, many retail might hold instead of accumulate
