CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

April Fools may be no joke for stock indices

March 31, 2021 4:10 PM

April Fool’s may be no joke for stock indices

With March month-end and Q1 quarter-end over and done with, positions have been rebalanced and window dressing has made all the big hedge funds look pretty.   April 1st is the beginning of the new month and the beginning of a new quarter, as well as, April Fool’s day.  However, don’t be fooled by any of the price action that occurs in stock indices.  Traditionally, new money comes into the markets at the beginning of each month.  For example, the Nasdaq 100 has been positive on the first trading day of the month for 5 of the last 6 months (the only exception was January 4th, 2021).  If the price action continues as such on April 1st,  the NASDAQ 100 may break the neckline of an inverse head and shoulders pattern, which would target new highs.  The current high is 13900.50, however the target would be near 14,384!

Source: Tradingview, City Index

The S&P 500 is currently putting in new all-time highs.  As of the time of this writing, price is near 3980.  The index has been in an ascending wedge since early November and is approaching the apex!  With today’s new highs above 3980, could we possibly see a move above 4,000 tomorrow?  Along with the psychological round number resistance, the top, upward sloping trendline of the ascending wedge crosses near 4010. 

Source: Tradingview, City Index

The German DAX is putting in new highs as well.  After surging through two 161.8% Fibonacci extensions over the last few days, the index is currently breaking above the upper trendline of an upward sloping channel.  Bulls will be looking to push the DAX higher!

Source: Tradingview, City Index

However, after April 1st, all bets are off!  Non-farm payrolls from the US will be released on Friday.  (See our preview here.) Current estimates are for ~650,000 jobs to be added to the economy!  However, whispers on the street are as high as 1,000,000 (which may be a bit stretched).  Regardless, the catch is that Friday is also a Holiday in much of the world, including the US.  There could be tremendous volatility after the print in the fx market (which is open)  and it may carry over into Monday’s stock market trading (for the US)!

Although April 1st is April Fool’s day,  April 2nd is not!  If stock market indices do continue higher on the 1st day of the month, that doesn’t mean they will continue the next day, especially when the next trading day is after the NFP release!

Learn more about index trading opportunities.


StoneX Financial Ltd (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.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024