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.

Fundamental moves forces technical overview shifts in equities and some FX pairs, retail shorts take profit in Dow and Nasdaq

Technical overview shift for Dow and Nasdaq as easing expectations get dented.

DOW: Technical overview shift on fundamental Fed tone

The Fed’s tone and two dissenting votes following a 0.25% rate cut were enough to cause market probabilities of future rate cuts out of the US central bank to drop significantly, and taking equities gains that were made on the back of monetary easing back down for the session. All the main US indices ended significantly in the red, and enough to shift this index’s technical overview back to a more consolidatory outlook but still showing positive bias as its DMI remains positive, its price still above all its main long-term moving averages, and a trending ADX that could cause pivot points to get breached more easily. In terms of earnings, GE’s results were better than expected albeit low to begin with, with an improved outlook in its power business where it usually struggles now showing ‘signs of stabilization’. On the trade front, US-China talks ended relatively quietly, with the next meeting slated for September.

NASDAQ: Fundamental move and weeks of oscillation force a technical overview shift

Although the technicals here look slightly more bullish than that of the DOW and with a positive DMI and its price above all its main long-term moving averages, a technical overview shift following weeks of oscillations and ending with a move lower on the Fed’s future rate cut likelihoods is more befitting. Digging a little deeper, AMD’s 10% decline lagged the most, while Apple managed to outperform with a strong 2%+ finish despite the sea of red in equities. Retail traders were significant beneficiaries of the recent move, with heavy short bias of 72% dropping to 66% on short profit-taking.

DAX: Falling global demand keeps the DAX at the lows ahead of more earnings

Easing expectations have been falling, more so for the US than for Europe even if the ECB didn’t act at its most recent meeting. European indices have been mostly underperforming, with final manufacturing PMI figures set to be released today to show ongoing contraction and test European export-oriented industries, with carmakers in focus on the tough Asian market and earnings from BMW (and GM for the US). Negative technical bias persists but is running up against long-term bullish bias on the weekly (see the Weekly Market Report for further details). As for retail traders, long bias dropped 14% as range-trading (and averaged-in longs) took profit on the brief rise. Meanwhile, the German 10-year yield continues to drop further into negative territories, now at a record -0.439%.

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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