Dow and DAX hug the highs, fresh record for the Nasdaq
Retail bias majority short for all three, CoT speculators remain majority long Nasdaq and majority short Dow.
Dow Technical analysis, overview, strategies, and levels
A week attempting to recover off of its low open, but where follow-through to the upside was limiting and opting to stay within its Weekly levels, Friday offering a conformist buy-on-reversal opportunity off of its Daily 1st Support level. Home Depot, Salesforce, and Apple were the relative outperformers by the close, most of its components in the red with near 10% losses in share price for both Intel (earnings beat but early hacked release and hesitation for third-party chip manufacturing licensing) and IBM (revenue miss). US data generally fared better, housing, manufacturing, preliminary PMIs, and employment all beating expectations.
IG client* and CoT** sentiment for Dow
As for sentiment, retail bias was as high as 70% sell mid-week before Friday's plummet gave a chance for fresh shorts to unwind, still heavy sell at 65%. CoT speculators aren't that far off at 62% with a reduction in longs by 1,005 lots outdoing a 307 lot drop in shorts.
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
Outperformance for the Nasdaq last week enjoying big gains, its price aiding conformist breakout strategies off of last week's Weekly 1st Resistance level, its 2nd level managing to hold. The same couldn't be said for Friday's Daily moves, its price retracing off of its key resistance level as its price oscillated near the highs. Incyte and Workday were the relative outperformers by the close on Friday, while it was Intel, Intuitive Surgical and CSX the biggest underperformers (the latter three releasing their earnings late last week). We'll get earnings from tech giants this week including Microsoft, Apple, and Facebook, and could result in more volatile moves for the tech-heavy index.
IG client* and CoT** sentiment for Nasdaq
In sentiment, CoT speculators have upped their majority long bias to 61% on a rise in longs by 1,462 lots and a simultaneous reduction in shorts by 777 lots. As for retail traders, they've shifted since the start of last week from a slight buy 54% to a heavy sell 65%.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
Another consecutive week of oscillatory moves, its bull trend technical overview stalling heavily (and more so on the Daily where nearly all its key technical indicators are neutral, the price moves within its previous Weekly levels while partially recovering off of its Daily 1st Support level on Friday, conformist buy-on-reversal opportunities failing on S/L's getting triggered. Component performance by the close showed few in the green, Siemens (prelim results beat) and VW (2020 profit beat) outperformers. German preliminary PMIs showed ongoing expansion in its manufacturing sector while services remained below 50 with a 46.8 reading, beating estimates with its previous revised lower. We'll get ifo figures and central bank speak from the ECB's Lagarde today.
IG client*sentiment for DAX
In sentiment, retail bias is heavy to the sell side following last week's price gains, but not significantly changed from the week before. When looking at retail traders in indices overall, the bias is majority short S&P, Dow, Nasdaq, DAX, and ASX while majority long in the FTSE. We don't get CoT sentiment figures for the DAX, but looking at US indices they've shifted to the middle in both S&P and Russell, are majority short Dow, and majority long in the Nasdaq.
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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