The relief fizzles out

8 Sep 2023

This week, we saw SPX move slightly lower. In addition to that, VIX gapped up on Tuesday and continued to move higher without filling the gap. Meanwhile, the relief fizzled out in China, leading to a rollover in the stock market indices like CSI 300 and Hang Seng. Considering American and Chinese markets are highly intertwined, we raise a word of caution over more weakness in the U.S. market.

Illustration 1.01

Illustration 1.01 shows the daily chart of VIX. The yellow arrow indicates an opening gap on Tuesday.

Illustration 1.02

Illustration 1.02 displays the daily chart of CSI 300. The yellow arrow indicates the initial spike after the regulator’s intervention in the market about two weeks ago.

Technical analysis gauge
Daily time frame = Neutral
Weekly time frame = Neutral
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages.

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DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.