Asian markets are trading generally firmer today despite the selloff in the US on Friday. At the time of writing. Nikkei is trading up 0.65%. China’s SSE is back from holiday and is up 0.35%. Hong Kong HSI is up more than 1.8%.
However, we’d like to point out that risks for deeper global market selloff remains. As we pointed out in the weekly report too, DOW’s triangle pattern is in shape after Friday’s selloff.
DOW’s rejection from 55 day EMA, below the near term trend line, and Friday’s selloff set up the pattern from 23360.29 to be a triangle consolidation pattern. Immediate focus will be back on 23360.29 this week. Overall, price actions from 26616.71 record high are seen as correcting the up trend from 2016 low at 15450.56. We’d expect deeper decline before the correction completes. And break of 23360.29 will target 38.2% retracement of 15450.56 to 26616.71 at 22351.24.