Dow and Nikkei 225 make gains, but Hang Seng slumps
Dow reaches another new peak
The Dow Jones index has hit fresh record highs over the past two sessions, breaking above the previous high from late September.
So far, the price shows no sign of any of the usual October weakness often seen in election years, though the losses usually come in the second half of the month.
Having surged through 43,000, the index is now over 4% from the 50-day simple moving average (SMA), currently at 41,347. This might lead to some short-term consolidation in due course.
Nikkei 225 hits new three-month high
Over the past 24 hours, the Nikkei 225 index has reached its highest level since late July, continuing its recovery from the August crisis.
Steady gains are the order of the day at present, with intraday dips still being bought. Further gains target 41,163, the March high, and then over time the index will target the highs from July at 42,485.
For the time being, trendline support from early September continues to provide an underpinning for the rally. A close back below 39,000 would see the price below this trendline and also back below the early September peak, a possible bearish development.
Hang Seng falls further
Hopes of a rebound here have been dashed as the Hang Seng price resumes its declines on disappointment regarding the lack of more solid stimulus announcements.
The slump from the October highs has been brutal, but then the surge to 23,500 was rather overenthusiastic, and leaves the index, and Chinese stocks generally, vulnerable to profit-taking.
The reversal today puts the sellers back in charge in the short-term, and now we look to the August 2023 high at 20,370 and then the May 2024 high at 19,789 to provide some short-term support. A close back above 21,000 might suggest the index has bottomed out.