Indices Open Bearish Dragged by Weak Data from China

EagleFX Team EagleFX

The stock markets were trading on the bearish side on Monday session dragged by weak data from China.

The Asian Hang Seng index registers 0.24% falling to 26,508 pts. In Japan's Nikkei Index, it drops 0.24% to 22,116.5.

In Europe, the bearish sentiment drives the Euro Stoxx 50 index, which loses 0.52% on the first trading session of the week, falling to 3,550.9 pts. The German DAX drops 0.23% to 12,449.9 pts, and the FTSE 100 dives 0.10% falling to 7,222.9 pts.

China's import and export data in September were worse than expected amid trade tensions with the United States. China's exports decreased by 3.2% in September compared to 2018. On the other hand, imports fell by 5.2% in the same period.

Besides the partial deal between the U.S. and China, the economic conditions of the two biggest economies continue showing deceleration signals.

Technical overview

NASDAQ, in its weekly chart, shows the possibility of the top in the technologic index on July 24, 2019, when the price soared at 8,037 pts.

Once reached the all-time high in late July, NASDAQ started a corrective sequence, which likely has completed waves ((A)) and ((B)) labeled in black.

If our hypothesis is correct, the market should run in a bearish wave ((C)) labeled in black. This pattern could be part of a wave A of upper degree marked in blue.

Long-term, using the Elliott Wave Theory, we could expect a decline to early June low at 7,005 pts. In the case of sell-off continuation, bearish sentiment could drive to NASDAQ until 6,580 pts and 6,015 pts.

From the latest CFTC report, we observe on the institutional activity, that bull traders reduced by 12.56% its long positions (WoW) while bear traders increased its short positions by 0.70% (WoW).

The institutional activity reported last week revealed that big traders hold 57.83% of positions on the bullish side.

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Author

EagleFX Team

EagleFX

EagleFX Team is an international group of market analysts with skills in fundamental and technical analysis, applying several methods to assess the state and likelihood of price movements on Forex, Commodities, Indices, Metals and

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