Dow and Nasdaq 100 Stabilize, Dax Faces Ongoing Challenges
Index Losses Slow, Dax Under Pressure
After two days of significant losses, the index still remains above its previous highs, as investors prepare for a busy week of earnings.
Further declines may target 40,080, and potentially down to the rising trendline support from mid-June. Bulls will look for a resurgence above 40,500 to suggest that a temporary low has been established.
First Major Pullback Since May
The past two weeks have seen the index experience its first real pullback since May.
The price approached the 50-day simple moving average (SMA) last week and has climbed higher this morning. A move above 19,800 will be needed to indicate that a low has been formed. This could then drive the index to aim for the previous highs around 20,750.
Weak Close Below 100-Day SMA
Friday marked the first time the index closed below the 100-day SMA since November 13.
June and July had the price holding above this indicator, so Friday’s weak close might indicate more losses are ahead. A close below 18,000 reinforces this perspective. Bulls will seek a move back above the 100-day SMA to fend off further decline expectations.
