CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81.76% 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.

81.76% of retail investor accounts lose money when trading CFDs with this provider.

CFD Update: NDX100 starting a new leg lower?

Published: 18.01.2022
by Joseph Jeffriess

Hi traders, today we’re looking at the NDX100 CFD index, which tracks the Nasdaq as its price crashed through a support point we have been watching since last week.

As mentioned, we spent most of today watching 15,500 which is a secondary support level below 15,600. This level was in play last week before the first breach occurred. The breach and today’s push lower have started to confirm the LH. Today all three major US indexes looked to be showing the same support patterns but as the European session progressed sharp selling kicked up after US treasury yields raced back to levels not seen since January 2020. The 10-year hitting 1.83%, remember this? This was a factor in a previous sell-off for stocks and could be returning. Last time this issue calmed down but for a week everyone was checking yield rates!

Another factor indexes are facing is earnings. Quarterly reports from 35 companies in the S&P 500 will be released in this weeks shortened trading week.

Back to the NDX100, we had hopes for the support range but this has started to look dashed at the moment after today’s break lower. Sellers have not only broken through support back have also started to test the longer-term uptrend. The next key move on the sell-side is to hold the move lower and beat the last HL. This changes the pattern of trend as we will have our first LH and LL. If we see a fightback tonight or if sellers fail to break the last HL there could still be small hope that we could sell some demand return.

A series of LHs and LLs indicates a normal downtrend and could be suggesting to us that a new medium-term downtrend has begun.

NDX100 D1 Chart

* The information provided on this page are the opinions of the author and do not necessarily reflect the opinions of Eightcap and are not endorsed by Eightcap.

Any person acting on the information presented on this page does so entirely at their own risk. No representation or warranty is given as to the accuracy or completeness of this information. Any research provided does not have regard to any specific investment objectives, financial situation and needs of any specific person who may receive it.

Margin trading involves a high level of risk and may not be suitable for all investors. You should carefully consider your objectives, financial situation, needs and level of experience before entering into any margined transactions with Eightcap, and seek independent advice if necessary.