Dow and Nasdaq retrace off fresh record highs while the DAX remains rangebound
Better than expected US data puts the squeeze on majority short retail traders, but a dent in trade deal hopes is keeping the Asian session in the red.
Dow Technical analysis, overview, strategies, and levels
With a bank holiday today and trading hours cut short tomorrow, there’s little on the economic calendar to entice volatility in the Dow save for any further trade updates following US President Trump’s signing of a congressional bill into law supporting Hong Kong protestors, and where investors are awaiting any ‘counter measures’ from the Chinese side. In terms of outperformers amongst its components, Apple was at the top, while in sectors it was consumer discretionary and services in the green while industrials contracted slightly. On the data front, US preliminary GDP (Gross Domestic Product) was better than expected, and prices under control according to Bureau of Economic Analysis’ latest reading, though there were worse than expected housing figures as well as ISM-Chicago’s PMI (Purchasing Managers Index).
IG client and CoT sentiment for Dow
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
As with the Dow and other US indices, with a bank holiday today and shortened trading hours tomorrow, liquidity is expecting to remain thin and trading relatively light, but where the Nasdaq posted a fresh record high and close yesterday. Nearly all its main technical indicators are flashing green, but the issue hasn’t been the direction rather the lack of intraday gains.
IG client and CoT sentiment for Nasdaq
Retail bias here has pushed to further extreme short levels, rising a notch to 79% as the squeeze on short traders continues. And while the Dow is experiencing extreme long bias on the CoT (Commitment of Traders) front, here the long bias is more moderate at only 62% as per last Friday’s release.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
Another day, another relatively rangebound session for the German DAX, but in slight retreat this morning as is the case for much of the Asian session. The catalyst has been worries over whether political woes in Hong Kong and the current US stance will feed into the possibility of an undoing of recent trade optimism, which would indirectly hit Germany’s export-competitive sector reliant on not just increased trade, but further USD liquidity that has served as the underlying for the bulk of international trade contracts facilitating the purchase of German goods. In terms of economic data on the German front, we’ll be getting preliminary CPI (Consumer Price Index) figures from across the country throughout the day and followed by German retail and employment data tomorrow.
IG client and CoT sentiment for DAX
In terms of retail sentiment, the bias here has surged to match that of the Nasdaq at an extreme short 79%, as the lack of price trending has forced more into range-trading.
DAX chart with retail and institutional sentiment
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