[Video] DAX Clings On As Sentiment Sits On A Knife Edge | Keep An Eye On DJIA

If risk-on can resurrect itself, then we can seek bullish setups within the channel. Yet if the negative vibe persists, we may need to ‘look out below’.

The DAX (Germany 30 CFD) and European equities in general took quite a hit yesterday when Germany’s IFO business sentiment plummeted and European PMI contracted a little further. Yet there was little time to recover after US extended the gloom with Market PMI data hitting its lowest level since May 2016. Indeed, with forward looking indicators heading towards contraction levels, it further lowers growth expectations and therefore company earnings. Traders were quick to dump stocks and move into bonds, which saw TLT break to new highs (nice call Kelvin) with the US 10 year yielding just 2.3%, its lowest since 2017.

Now clinging onto its 2019 bullish channel, the DAX finds itself at a pivotal moment. If risk-on can resurrect itself, then we can seek bullish setups within the channel. Yet if the negative vibe persists, we may need to ‘look out below’ if key support gives way or the potential large reversal pattern on the Dow Jones Industrial (Wall Street 30 CFD) kicks into action.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.