Dow, Nasdaq, and DAX all plummet on worsening trade war
Apple lags on the Dow while auto shares get hit on the DAX.

DOW: Outlook turns fundamentally bearish but some main technicals still in the green
Apple lagged the most on Friday, no surprise given the increase in tariffs on Chinese imports into the US and a potential shift away from manufacturing in China would significantly hurt future earnings. The rest were predominantly in the red, as a worsening trade war is expected to hit demand and disrupt supply chains, even if current US economic figures aren’t dovish. Preliminary GDP this Thursday will matter, but not so much compared to any further worsening in trade relations. From a technical standpoint long-term bullish bias is running up against clear short-term downside movement. Retail bias is down 9% since the start of the week to a majority short 54% with shorts getting enticed into closing out, while institutional bias is still at extreme long levels with a reduction in longs by 4K lots doing little to dent its 88% long bias.

NASDAQ: Plummeting in clear risk-off event fueled by the trade war
As with the Dow, this tech index also got hit hard on Friday, suffering a larger percentage drop and hurting tech companies with large exposure to Chinese manufacturing and the Chinese market. And as with the Dow, the technicals are conflicting with short-term bearish bias running up against long-term bull trend lines and indicators. But retail traders aren’t complaining here either, with the price drop enticing shorts into closing out and dropping majority short bias by 8% at the end of last week alone, standing as of this morning at a modest short 59%. Institutional bias on the other hand, is at a near exact opposite majority long 60%, with little change in long and short positioning occurring.

DAX: Technical bias remains negative on worsening German data and trade war
Unlike the Dow and Nasdaq, long-term bullish technicals for this index have evaporated more swiftly, as German manufacturing has taken a harsh hit on a worsening trade war between the US and China, and set to take an even larger hit if it spreads to include taxes on imports of German cars. They lagged the most on Friday, with BMW and Daimler at the bottom and VW not that far off. Retail bias is little changed for the week, but on Friday alone shifted from a majority short 59% to a majority long 59% as sizeable range-trading takes hold. On fundamental news, breakout strategies have yielded more than fading strategies prone to being stopped out.

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