Week Ahead: A Strong Jobs Report Brings Optimism to the Earnings Season

Week Ahead, 7 Oct 2024

Actual Non-Farm Payroll (NFP) figure significantly exceeded consensus estimates, coming in at 60% higher. This stronger-than-expected labor market data increased the likelihood of a smaller, 25-basis-point interest rate cut by the Federal Reserve, compared to the more aggressive cuts anticipated by the market.

Bond ETFs like TLT declined by 1.23%, while the S&P 500 reversed its earlier losses to close up 0.90% for the day. Upcoming earnings reports could provide additional momentum for the US stock market.

While we remain cautious on the S&P 500, our technical target remains at 5,900-6,000, as long as the index stays above the support level of 5,650.

Meanwhile, the Chinese market is set to reopen on Tuesday. Social media channels indicate that many investors are eager to open brokerage accounts to participate in the potential rally.

The China A50 index remains on an upward trend, approaching its first target at 14,300. The Hang Seng Index (HSI) is currently at its first resistance level of 22,700. The stronger dollar following the NFP report could lead to a consolidation at the current levels.

Headlines for the week:

- US Corp Earnings (JPM, WFC)

- US Aug CPI, PPI, FOMC Minutes,

- China markets reopen

Disclaimers apply

Wyckoff's Law of Effort

Law of Effort Wyckoff's Law of Effort states that on any single trading day (or week depending on time frame), huge volume (effort) push by participants should see huge price movement, resulting in a wide spread (long body). This is a basic principle of effort and result. However, as per Singtel's case study, we saw huge selling volume on 11 May, yet the price action only shows a narrow spread (small body). This divergence of effort and result in Wyckoff's Law of Effort principles, indicates possible exhaustion in selling or hidden buying. Thus, with a lack of weakness, Singtel should continue trading range bound for the coming days or weeks till further strength or weakness is observed. Swing Traders who trades range can consider positions at 3.70-3.72, with exit target 3.76-3.78.

DBS Group Holdings (D05): Upward Move Expectations

DBS Group Holdings (D05) Upward Move Expectations Technically, price trading above 36.58, could see DBS Group retest previous high of 38.55. Both Relative Strength and momentum indicator FFI are supportive of the move. Stop below 35.42 Disclaimers apply

Keppel DC REIT (AJBU): Expect price to trade towards S$2.00

Keppel DC REIT (AJBU) Expect price to trade towards S$2.00 We have observed a decrease in technical supply at the S$1.80 support area during recent trading sessions. Furthermore, a softer interest rate outlook could be advantageous for the Data Centre operator. Consequently, we anticipate the REIT to move towards our initial target of S$2.00, with the potential to reach S$2.20 if it breaks through resistance. Our stop level is set below S$1.72. Disclaimers Apply

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