Sharp rise and fall is suspicious (June 13, 2024)

Preface: Yesterday, China and the United States released their respective Consumer Price Index (CPI) data, but the reactions in their stock markets were vastly different......

U.S. Market Update

The U.S. announced its CPI data before the market opened last night. At 3.3%, it was only 0.1 percentage points lower than the market's expectation of 3.4%, but the market interpreted it as below expectations, leading to a surge of over 300 points in the Dow Jones Industrial Average. The Dow opened high but closed lower, eventually ending the day down 35 points at 38,712. Meanwhile, the NASDAQ Composite Index hit another record high, closing at 17,508 points, up 265 points.

As mentioned earlier, the U.S. CPI was only slightly below market expectations—some might even say it met expectations—yet the Dow skyrocketed by 300 points like a rocket last night. What struck me as suspicious was the Dow's high-open-low-close pattern, ending in a decline. This kind of movement gives me the impression of a final push to offload positions. As for the "divergent performance" between the NASDAQ and the Dow, it feels like another smokescreen. Honestly, was there any real justification for the NASDAQ to rise 300 points last night? I couldn't spot one.

At this point, the U.S. stock market is like walking on thin ice. Friends still holding U.S. stocks should tread carefully... Of course, the best choice might be to exit the U.S. market altogether.

Hong Kong Market Update

The Hang Seng Index briefly fell to 178 yesterday but rebounded to the 181 level at today's open. Gains narrowed during midday trading, and the index eventually closed at 18,113 points, with turnover dropping to HKD 107.3 billion.

Strategy

The weakness in Hong Kong stocks has solidified, and the Hang Seng Index has formed a head-and-shoulders top pattern. For now, the market's key level to watch is whether it can hold above 18,000. If it breaks below, support is likely around 17,200. The best approach right now is to watch and wait.

(The views expressed above are solely my own. Any investment strategies provided in this article may not be suitable for everyone and should not be construed as an invitation or intention to buy or sell any financial products. Securities prices can rise or fall and may even become worthless. Trading securities does not guarantee profits and may result in losses. Investors and clients should exercise caution and consider this as just one of many factors in their investment decisions.)