Market Technician

It is not surprise that many traders and investors watches the US Yield Curve like a Hawk. According to SeekingAlpha.com, the yield curve inverted 6 out of 9 times before the US and global stock market peaks. There are a few causes for the yield curve inverts and one of the most prominent reason is tightening of interest rate by US FED. Its not an easy job to correctly execute the tightening of an over heating economy, and many a times, over tightening leads to economic recession in the US. Following are 3 charts showing the present yield curve and the previous inverted yield curve happening just before the market peaks.  The current US yield curve has flatten but yet to invert, Singapore investors should keep a close eye on the short end of the yields curve (3mths, 2years and 5 years). 

China Construction Bank (939:HK) The stock price made a breakout this morning, out of its possible accumulation zone since mid Feb 2018. A breakout would suggest the stock is ready for Mark Up towards 1st target at HK$8.60 with 2nd target at HK$9.00. The stock's momentum also showed signs that the bears are exhausting as MACD indicator flattens and suggest a reversal of momentum may be in the cards. A break below HK$8.00 will falsify the set-up.  Disclaimer applies.

HKEX:700 (Weekly Chart) traded below its 8 month old upward trend line with heavy volume sell off seen during the week of March 19th-23rd.    Last week of March, stock price made failed attempt to trade back above the trend line . This became evident that the trend line has turned from support to resistance. Weekly MACD is also trading in bearish momentum.    Applying Fibo, the expected downward target is HK$360-370  level.