Bullish session for Dow, Nasdaq, and DAX tests retail short positions
Coronavirus figures fail to slow down, yet central bank easing crucial to ongoing share price increases.
Dow Technical analysis, overview, strategies, and levels
It was a bullish day for equities yesterday, with the Dow rising and aiding conformist breakout strategies, and in turn keeping its technical overview that is bullish on the weekly but more tested on the daily intact. In terms of its components, Merck was at the bottom after its revenue miss and a plan to spin off slower-growth businesses. Sector performance across the US showed energy outperforming (for a change) following a slight rebound in oil prices and nearly all sectors in the green save for real estate which was only slightly in the red. Tomorrow's NFP (Non-Farm Payrolls) will be the next significant item in terms of economic data, though as always any global risk-related moves may have a significant effect on indices like the Dow.
IG client* and CoT sentiment for Dow
In sentiment, the results have meant that retail short bias has risen into heavier short territory, standing now at 76% compared to yesterday's heavy short 70% (and the day before's 60% short bias).
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
Another day, another fresh record high for the Nasdaq as tech stocks continue the charge higher, whereby this time around Tesla was the big underperforming following its warning that the coronavirus would hit deliveries. Few of the tech index’s components were in the red, and as it stands its bull trend technical overview remains intact, even if on most days it has been stalling and failing to offer significant follow through beyond buy breakout opportunities. That would mean any retracement could break pivot points as well, making breakout strategies outperforming compared to fading ones that could be at risk of being stopped out.
IG client* and CoT sentiment for Nasdaq
In sentiment, retail short bias has plummeted from a previous extreme short 77% to a heavy short 67% with shorts having gotten squeezed throughout this big bull run.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
As with the Dow and Nasdaq, the DAX was also a beneficiary off the recent bullish moves in equities, that took its price past yesterday's 1st Resistance level and in line with conformist volatile breakout strategies on more erratic risk-related flows. Few of its components were in the red, and its price is now above all its main moving averages, and where a positive DMI (Directional Movement Index) cross occurred.
IG client* and CoT sentiment for DAX
As such, with range-trading heavy in this index, retail trader sentiment has pushed back towards extreme short territory at 79% now, having only been at a majority short 55% at the start of this week.
DAX chart with retail and institutional sentiment
* The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%.
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