CoT bias shifts back to majority long in Nasdaq
Retail bias remains majority short in Dow, Nasdaq and DAX ahead of a string of earnings this week.
Dow Technical analysis, overview, strategies, and levels
Mostly a rangebound week for the Dow with its price tested early on last week but aiding conformist buy-on-reversal strategy as it partially recovered towards the end of the week. Amongst its components, Boeing was one of the few in the red (a regular theme for the airplane maker), and over the weekend it terminated its partnership with Embraer. All the US sectors were in the green on Friday, energy up the least and tech gaining the most. This week is heavy on earnings, with big tech giants (including those that are components of the Dow like Microsoft and Apple) and the Oil Majors including Chevron and ExxonMobil releasing their figures.
IG client* and CoT sentiment for Dow
As for sentiment, retail bias is still in heavy short territory starting the week at a sell bias of 70%, and larger speculative traders according to the latest CoT (Commitment of Traders) report have raised their short bias to 65% on an increase in shorts by 1,813 lots.
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
As with the Dow, the Weekly buy-on-reversal was the main conformist strategy in play after the Nasdaq got tested last week, and failing to undo its current bull trend channel on the daily chart. On Friday, Expedia outperformed though there were a handful of its components in the red that included Dollar Tree, Marriott, and Netflix. And while the technicals remain bullish on both the Weekly and Daily, there are plenty of earnings this week from the tech giants that could infuse equities with more volatility.
IG client* and CoT sentiment for Nasdaq
Going into this week's releases retail traders are holding a heavy short 66% bias while CoT speculators have shifted from the middle back to majority long on an increase in consolidated Nasdaq long positions by 941 lots and a simultaneous reduction in shorts by 755 lots.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
When it comes to volatility, the DAX has disappointing with mostly days of rangebound movement that has failed to aid breakout strategies and enticing more traders into (further) range-trading the German index as neither pivot point reached. But that doesn't necessitate that pivot points will continue to hold, especially with earnings and central bank announcements (including that of the European Central Bank) this week. Amongst its components, airliner Lufthansa was at the bottom on Friday, and Deutsche Bank not that far off ahead of its earnings this week, warning yesterday it might miss its capital requirement targets.
IG client* and CoT sentiment for DAX
With trend traders getting tested, range-traders are quicker to take profit on any downside movement in price, with the weekly drop taking retail short bias from a heavy short 66% down to 61%.
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.
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