Brief: Dow Jones, DAX Index, Hang Seng Point Higher Ahead of Earnings

Global stocks are mixed today as focus remains on Brexit, US stimulus, China yuan rule change, and the upcoming earning season. In Asia, the Hang Seng index is up by 2.23% while the Shanghai Composite is up by 2.25%. Meanwhile, in the United States, futures tied to the Dow Jones, S&P 500, and Nasdaq 100 indices are little changed but tilted towards the upper side.

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NAS100

NAS100 (11294)

Not in Sell Zone

STOP

SELL

TP1

11182

TP2

11000

In China, the Shanghai composite, A50, and other indices are deeply in the green as investors react to a rule change by the People’s Bank of China (PBOC). This was in reaction to a significantly weaker yuan as the bank made orders to make it difficult to bet against. The currency, which has been gaining against the US dollar declined by more than 1% today.

Also, equities in the country rose ahead of a visit by Xi Jinping to Shenzhen as investors remained optimistic that his visit will open the region more to international firms. The Hang Seng is trading at H$24,658.

In the United States, futures tied to the Dow Jones, S&P 500 index, and Nasdaq 100 index are trading at $28,600, $3,480, and $11,780, respectively. This is because investors remain optimistic that the Democrats and Republicans will reach an agreement. That is after the White House increased its request to more than $1.8 trillion. However, since the indices are little changed, it is a sign that investors are unsure about the deal.

Meanwhile, the Dow Jones and other indices are reacting to the upcoming earnings season. The season will start tomorrow when banks like JP Morgan, Citigroup, and Wells Fargo will release their earnings. Other top companies that will release their earnings this week are Blackrock, PNC Financial, and Fastenal, among others.

In Europe, futures are tilted to the upside. In Germany, the DAX index is up by 0.27% while in the United Kingdom, the FTSE 100 and CAC 40 index are up by 0.15% and 0.40%, respectively. This price action is mostly because of the anticipation of corporate earnings.

Dow Jones technical outlook

The 2-hour chart shows that the Dow Jones futures have been in a strong upward trend in the past few weeks. It has jumped from a double bottom low of $26,547 on September 25 to a high of $28,730. The price has also moved above the important resistance level at $28,385.

It is also above the 25-day and 15-day exponential moving averages. Also, it is above the ascending trendline that connects the lowest points in September and October.

Therefore, I suspect that the price will continue rising as bulls aim for the next resistance at $28,800. On the flip side, a move below the support at $28,500 will invalidate this trend.

Dow Jones index technical chart

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