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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Dow, Nasdaq, and DAX finish in the green despite fundamental worries

Fed’s Powell speech tomorrow and today’s preliminary PMI figures the next item in focus for indices.

Indices Source: Bloomberg

DOW: Technical overview shift even as fundamental catalysts remain unresolved

With the bulk of its technical indicators back to neutral and a non-trending ADX, a technical overview shift was long overdue tilting it back to a more consolidatory outlook with its price briefly crossing its 100-day moving average. The catalyst(s) for the recent price drop that occurred earlier in the month however remains unresolved, with trade tariffs, a Fed that may not ease further (depending at this stage on the tone of Powell’s speech tomorrow), and rising geopolitical risks. As for retail bias, it has increased 9% to a heavy short 68% as range-trading longs take profit and leaving shorts averaging in at the short-term resistance level.

Dow Source: IG charts
Dow Source: IG charts

NASDAQ: A green finish despite fundamental worries

Although fundamental worries haven’t subsided just yet, equities have managed to retrace off the lows and post a green finish yesterday, with the Nasdaq certainly no exception to that rule. However, as with the Dow, the catalyst for those fundamental moves earlier in the month remain unresolved. From a technical standpoint, it’s looking more bullish for this index with most of its technical indicators now positive and combined with a trending ADX, though any fundamental news will make breakouts and reversal strategies more in tune with price action than fading strategies that’ll be prone to stop outs. Like the Dow, retail bias has risen further into majority short territory, and here it’s up 2%.

Nasdaq Source: IG charts
Nasdaq Source: IG charts

DAX: At risk of a technical overview shift ahead of German preliminary PMI figures

The index’s bear trend line has been broken, all its main technical indicators are back to neutral, and its price crossed and finished above its 200-day moving average. On the fundamental front, Germany’s 30-year bond auction was in negative territory, meaning as long as companies can yield decent enough dividends it’ll be an attractive proposition in a world where the hunt for yield is getting ever tougher. In the process of yesterday’s price gains that have gone against the stalling and weakened bull trend technical overview, retail bias has shifted from a majority long 55% to a majority short 59%.

Dax Source: IG charts
Dax Source: IG charts

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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