CoT bias in majority buy territory for US indices
Earnings from plenty of companies this week before focus shifts to elections.
Dow Technical analysis, overview, strategies, and levels
A brief glance at the Dow's Weekly chart and its bull trend channel is barely holding, its price offering a conformist buy-on-reversal off of last week's 1st Support level on the Weekly, while failing to reach either of its key levels on the Daily late last week. In terms of component performance on Friday, it was Intel in the very bottom suffering double-digit percentage declines following its third-quarter earnings which revealed weakness in its data center business, Bank of America downgrading it to underperform from neutral. American Express was second from the bottom reporting an earnings miss, a revenue beat, and a dismal outlook on business travel. US preliminary PMIs out of Markit were above 50 while housing data impressed, with another item out of the housing sector today.
IG client* and CoT** sentiment for Dow
CoT speculator bias has risen to 54% buy on an increase in longs by 3,607 lots outdoing a 697 lot increase in shorts, while retail bias is still majority short.
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
There was little action for the Nasdaq late last week failing to offer a Daily play, while on the Weekly its 1st Support level managed to hold after briefly breaking on more than one occasion, aiding conformist buy-on-reversals off the level in the process. In terms of Friday's component performance, Align Technology was on top, with Xilinx (better than expected earnings) and AMD (rival Intel's woes and delays). Intel (also a component of the tech-heavy index) was in the very bottom, with Citrix (despite its earnings beat) and Micron suffering. It's a big week for earnings that'll include the tech giants, and combined with any other news on the fiscal front (or lack thereof) and election poll shifts will be items to note on the fundamental front.
IG client* and CoT** sentiment for Nasdaq
After shifting from majority short to majority long a couple weeks back, Nasdaq-consolidated sentiment amongst CoT speculators has moved closer to the middle with longs dropping by 1,510 lots and shorts rising by 810 lots.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
A red week for the DAX, and an undoing of its technical overview on both the Daily and Weekly from a previous stalling bull trend technical overview, its price breaking beneath its key Weekly Support levels mid-week while aiding conformist reversals on the Daily towards the end of it. ECB easing isn't expected to end and may in fact increase should the central bank aim to combat inflation more assertively, and that might provide a floor for equities at the very least in the mid-term as they meet this Thursday, even as the bloc battles rising coronavirus cases and restrictions are imposed. For German data, preliminary PMIs were mixed with services a miss and manufacturing beating estimates, with ifo up next.
IG client* and CoT** sentiment for DAX
In sentiment, retail bias shifted starting this week with a slight buy 54%, and CoT figures aren't available for European indices, so looking at US indices they're majority long all four (Dow, Nasdaq, S&P, Russell).
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%, as of today morning 8am for the outer circle. Inner circle is from the previous trading day.
**CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior.
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