Retail bias shifts in Dow and DAX to majority long, Nasdaq in the middle
Short profit-taking and longs entering shift retail bias to majority long as equities plummet on rising recessionary fears and a worsening trade war.
DOW: A technical overview shift as its underlying turns volatile
Equities were in freefall yesterday and the net result for this index's technical outlook is a shift on the daily from what was a stalling bull trend to a more consolidatory outlook that's still conflicting and could entice contrarian breakout strategies should it remain volatile. Keep in mind that the main technical indicators are huddled close to each other, and hence technical overview shifts could become more common on less significant movement, just as they ought to be disregarded upon the release of tomorrow's US Non-Farm Payrolls (NFP) report to see how the dent in manufacturing could affect jobs in that sector. Retail bias has shifted from what was a majority short 53% to a now slight majority long 54%.
NASDAQ: Not spared the equities rout
The tech index wasn't spared in the onslaught that occurred yesterday, with its price crossing below its 100-day moving average (MA) and only stands above one of its main MA's, the 200-day MA. The consolidatory outlook may be befitting given where most of its main daily technical indicators are, however, with increased volatility and fundamental tier 1 data tomorrow could make breakout strategies more ideal. In terms of retail sentiment, it has shifted to the middle while the Dow and DAX both shifted to majority long.
DAX: Risk appetite falling and an expanding trade war engulfing Europe
Risk appetite has taken a significant hit over the past two days, and the German DAX was one of the casualties, especially as the US trade war spreads into Europe following the announcement of tariffs on European goods that’ll go into effect on October 18, and likely result in a retaliation. The net result from a technical overview standpoint is an undoing of its stalling bull trend technical overview and crossing below both its 100-day and 50-day moving averages and shifting retail bias from what was a majority short 57% to a now majority long 58%. It’s a German bank holiday today, but it won’t be spared tomorrow’s risk appetite fallout from US Non-Farm Payrolls.
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