Daily Alert – Wednesday 28th July 2021: Looking for reversal after China halts share slide
The Chinese government, through emollient words, has managed to halt the slide in Chinese stocks that is of their own making as they cracked down on large online companies. There is a reversal opportunity here. I will keep an eye on the HongKong50.
Elsewhere, markets remain calm in the run up to tonight’s Fed announcement. Yesterday was risk-off as equities and the US 10-year yield fell. Oil and GOLD hardly moved. The JPY continues to track sentiment accurately. The GBP looks like the top G7 performer and gets a significant fillip as the government looks set to open travel to the US and EU for double vaccinated travellers. Parliament will vote on this later today.
The Japan225 was nicely set-up for a long yesterday. However, I did not take the trade as we were risk-off. Just as well. Had I been triggered into the trade and I would have lost my capital. This underscores, again, the importance of sentiment in our calculations.
Next in focus is tonight’s Fed announcement.
I’ll see you again tomorrow.
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