While there is extreme volatility in the currency markets, stocks were relatively calm though. DOW again staged animpressive comeback overnight. It initially dipped to as log as 22928.59 but closed up 18.78pts or 0.08% at 23346.24. S&P 500 rose 0.13% and NASDAQ gained 0.46%. In Asia, Japan is still on holiday. China Shanghai SSE is currently flat. Hong Kong HSI is down -0.44% while Singapore Strait Times is down -0.73% only.
DOW future is currently down over -300 pts in Asia. And we’ll have to wait and see how US stocks would react to Apple’s cutting of revenue outlook later in the day. But technically, we’d like to reiterate that while DOW’s post Christmas rebound was strong and impressive, it has yet to take out and important resistance zone yet.
That is, 100% projection of 21712.53 to 22877.09 from 22267.42 at 23431.98, the projection level for the corrective rebound. Also, there is 38.2% retracement of 26951.81 to 21712.53 at 23713.93. As long as this resistance zone holds, the long term corrective fall from 26951.81 is still more likely to head to 20000 handle or not.
US treasury will be another key factor to watch ahead. 30-year yield finally closed below 3% handle at 2.982 overnight, down -0.038. 10-year yield dropped -0.025 to 2.661. More importantly, after the Apple news, 10-year yield is now down to 2.620 in Asia. It’s very close to 1-year yield at 2.616.