Dow and DAX partially recover, Nasdaq finishes in the green

Retail heavy short bias drops in all three.

Dow Technical analysis, overview, strategies, and levels

Having suffered a risk-off mood in the financial markets after Apple's revenue warning, the Dow finished the session only partially in the red, and in turn recovering off of yesterday’s 1st Support level after testing it heavily. In earnings, Wal-Mart's results were slightly below expectations even as revenue climbed, and it was one of the few outperformers amongst the Dow’s components, and where Apple and Intel were near the bottom. As for sectors, most were in the red, with defensive utilities managing to outperform but not by much.

IG client* and CoT sentiment for Dow

Retail traders aren’t complaining with the recent price drop and wouldn’t do so should it persist, as retail bias here has dropped by 4% but remains in extreme short territory at 78% awaiting further price declines.

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

Between the Dow and Nasdaq, the latter managed to outperform and finish in the green with a move off of yesterday’s 1st Support level that managed to hold, keeping its technical overview of a stalling bull trend intact but where it could easily be tested on any ‘risk-off’ move. Tesla outperformed followed by T-Mobile, though quite a few components were in the bottom including Apple whose revenue warning due to the COVID-19 virus continues to hit its share price.

IG client* and CoT sentiment for Nasdaq

In sentiment, while retail bias has dropped, the bulk of those shorts have been initiated at lower prices and will need far more to unwind short positions in profit, with the current bias standing at a heavy short 68%.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

German ZEW figures yesterday disappointed and fell below expectations as the export-oriented economy gets tested in the current dented trade environment. For the German DAX, it took a hit alongside other indices earlier in the session as part of the global 'risk-off' mood, only for the recovery to help its price avoid reaching yesterday’s 1st Support level and finish only slightly in the red. There's a dearth of German data today, though we will get earnings from Deutsche Telekom AG which was an outperformer amongst its components yesterday, and where Daimler and other automakers were near the bottom amongst underperformers like Deutsche Bank.

IG client* and CoT sentiment for DAX

With range-trading heavy here amongst retail traders, extreme short bias has dropped by 4% to 78% (identical to that of the Dow).

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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