20 October 2020 (7:38 am IST)
19 October 2020 (10:08 pm EDT)
US stock markets crashed in their overnight session, even though a covid-19 stimulus talks are going on. Major indexes dropped by big numbers. Dow Jones lost more than 400 points and Nasdaq closed with a loss of almost 200 points.
We had recently talked about the weekly chart of Dow Jones, where the index was creating a “double top” formation, which usually indicates a lower trend. Yesterday, Dow Jones created a big “double top” on its daily charts too. We can expect a minor downtrend in this index in the near future.
World stock markets are trading negative in Asia session, following the fall in US stock markets. All major Asian stock markets are trading in the red. SGX Nifty is down by 25 points, indicating a subdued opening for Indian stock markets too.
European stock futures are showing single digit gains. US stock futures are positive, which was expected after the previous fall. But, we saw on Monday that in spite of highly positive futures, US stock crashed after the opening bell. Also, the weekly trend has become highly negative for US markets. So, day traders should not trust these green numbers too much.
How To Day Trade:
- World stock markets will stay choppy and highly volatile as long as the US presidential elections 2020 will remain under way.
- This is definitely NOT the time for positional trading.
- Do day trading and at the end of the session, exit all your positions.
- Even intraday session could stay highly volatile, so it would be better to wait for a clean, trending phase and trade only during that time.
- For today’s day trading, the best strategy would be to focus on your local markets and its trend, which is expected to be negative.
- Keep checking the trend line, When you can draw a smooth trend line in 5-minutes’ chart, follow that trend line and trade as long as price follows it.
- Exit when price breaks the trend line.
World stock markets are following the negative minor trend in US stock markets and trading mostly negative. Although US stock futures are trading positive, global stocks are ignoring those numbers after major US indexes had a major fall in their overnight session.