Range-bound movement for the Dow, Nasdaq, and DAX
Fed’s decision does little to change indices in mostly oscillatory session.
DOW: Relatively range-bound despite the Fed’s decision
Risk appetite managed to recover later in the session to aid this index to a slightly higher finish yesterday following the The Federal Reserve’s (Fed’s) decision, though expectations were that given much of the recent gains were built on both Fed easing as well as a potential reduction in trade risks, it would be at risk of an eventual reversal. And as it stands, retail bias is heavy short at 71%, while institutional bias dropped last week slightly but still remains at extreme long levels. US Philly’s manufacturing data will be released tonight, though unlikely to cause volatility like yesterday's US Federal Reserve’s Open Market Committee (FOMC).
NASDAQ: Positive technical bias still holds, but for how much longer?
As with the Dow, the movement was relatively range-bound, and in the case of this tech index gave some retail shorts initiated at the highs an opportunity to take profit, pushing the overall bias a couple percent down to a heavy short 65%. Despite the movement to the downside (and downside risks following the Fed’s decision and a lack of answers on the trade front), the technicals continue to show ongoing positive bias. But if we’ve learned anything especially with movement on the index front, it’s that fresh fundamental news could easily put breakout strategies into play over reversals, especially when it effects risk appetite.
DAX: Slight movement higher takes retail bias 4% higher
Although it was but a slight finish higher for this pair and failing to reach either of the main pivot points, retail bias has already inched 4% higher. No surprise given that amongst retail traders this index is where significant range-trading occurs, and hence it only takes a small price movement to cause a significant change in sentiment. From a technical standpoint, its bull trend is still holding albeit stalling at the highs, and where ongoing oscillations could easily cause its main technical indicators to shift. With German data a disappointment, its economy possibly going into a recession, and the trade war not resolved, its fair to say that the gains in this index were made anticipating the effects that the European Central Bank's (ECB) easing program will have on improving risk appetite and forcing money out of ‘risk-free’ assets and into riskier trades.
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