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
✖

Weakness in Dow Jones but not for FTSE 100

Article By: ,  Financial Analyst
July 11, 2012 11:30 AM

We expected weakness to continue and so far the Dow Jones has played to a tune but the FTSE 100 has held onto strength. If the indices are to continue lower then momentum really needs to follow through. But the Dow Jones may be at a short term low and move higher briefly lifting the UK markets along the way. However the real key is how much higher these markets can move. If weakness continues by the end of this week then we could be in full swing bearish territory by next week. Gold has fallen to the downside again in line with the bearish signals provided earlier. See key levels below:

FTSE 100 in consolidation mode

So far the index has not shown signs of a bearish momentum reversal. Although the FTSE 100 has reacted at the 5700 resistance barrier what is really required a continuation to the downside by now breaking below 5600. For upside moves the 5695 should be taken out. Until either of these two levels have been cleared we could be sitting in a consolidation phase. Ideally a bearish move lower should occur given that the 5700 level has been a hurdle. If the FTSE 100 does trickle down then the 5595 level may provide very short term support.

FTSE 100

Dow follows through lower

Having broken below 12700 the Dow Jones has clearly shown weakness is apparent. We also now have a bearish momentum reversal signal occur after Tuesday’s sharp decline. Wednesday will need to trade below 12606 to ensure that the bearish trend is going to continue. If the index fails and moves above the high of 12829 then the signal would not be valid. There is also the possibility that the Dow Jones could head higher to complete a five wave reversal pattern at 13060 before the expected move to the downside occurs. A break above or below Tuesdays levels should provide further information.

Dow Jones

Gold weakens again confirming weakness

Now that Gold has fallen $1,576 the metal is likely to test the lower boundary of $1,547 fairly soon. As discussed previously the commodity is range bound until we see very clear breakouts of the recent channels. But if the bearish momentum continues then most likely the objective of play will be for Gold to see $1,485 over the coming weeks. It really will require a complete trend reversal by seeing a thrust above the $1,607 resistance level and then move towards $1,677. This commodity will require patience for another week or two before it resolves the current pattern breakout.

Gold

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