Dow, Nasdaq, and DAX finish slightly lower for the session ahead of earnings
China pours cold water over trade truce hopes, risk appetite drops and takes indices slightly lower with it.
DOW: Earnings season with financial heavyweights today
Earnings season is upon us, and it'll be financial stocks that'll be most volatile given the big financial institutions will be releasing their figures including JPMorgan, Citigroup, Goldman Sachs, and Morgan Stanley. Earnings from industrials this week will provide more insight into how the sector is performing in the context of the current US-China trade war, as lurking in the background, the trade truce seems almost immediately undone. From a technical standpoint – and it’ll mean less given the current fundamental context – its 50-day moving average on the verge of crossing back above the 100-day moving average.
NASDAQ: Finishing lower as risk appetite drops
The index’s price didn’t finish that far off from where it started, managing to recover later in the session despite worsening trade news, and causing no change in retail sentiment that remains at a heavy short 73%. Earnings from financials early in the week will affect the Dow more so than the tech Nasdaq, though that's not to say overall risk appetite can't be affected, which in turn may entice contrarian breakout strategies over conformist fading and reversals.
DAX: Resting near its mid-term resistance level as bull trend gets tested
Most of its main technical indicators are bullish on both the daily and weekly, and while its volatility strategies on the weekly, on the daily short-term outlook it is looking more bullish even if its mid-term resistance level is holding. Should it breach or hold, and more volatility in either direction can be expected. The brief dip gave retail shorts a chance to take profit, and while its down 5% its still close to extreme short levels.
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