Dow and DAX surge, Nasdaq’s gains limited
Shorts get tested on recent surge ahead of ECB announcement likely to affect European equities and NFP for US indices.
Dow Technical analysis, overview, strategies, and levels
The Dow was an outperformer yesterday against the tech-heavy Nasdaq for a cross and finish above its 200-day moving average to send all of its key technical indicators flashing green. Conformist buy breakouts outperformed with a move above yesterday's 1st Resistance level, and nearly all its components finished higher for the session. The gains were largest for Boeing with double digit percentage increases, and financials' American Express and JPMorgan enjoying sizeable gains. The few finishing in the red included retailers Walmart and Home Depot. ADP's (Automatic Data Processing) non-farm estimate was well above expectations, and ISM's non-manufacturing PMI (Purchasing Managers Index) was below 50 but beat estimates. We get more employment data today with claims before attention shifts to tomorrow's market-moving NFP (Non-Farm Payrolls).
IG client* and CoT sentiment for Dow
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
While the tech-heavy index finished higher, the gains in the Nasdaq were limited and failed to offer any pivot point action on yesterday's key levels. Given the relative lack of gains, there were plenty more components in the red here compared to the Dow, with gaming stocks and pharmaceuticals suffering big losses. Microchip was the outperformer with its share price up more than 12% after raising its first quarter guidance, and travel site Expedia and hotel operator Marriott were also amongst the outperformers. In earnings, Broadcom will be releasing its figures today, though overall the attention has been on economies reopening, fundamental economic data set for release today and tomorrow, and overall risk appetite.
IG client* and CoT sentiment for Nasdaq
Retail bias is still heavy short here and little changed since yesterday, the lack of price gains failing to test short positions as heavily as they have been squeezed in Dow and DAX.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
It was a large and noticeable day of gains for the DAX yesterday, its price surging well beyond yesterday's 1st and 2nd Resistance levels to aid conformist buy technical overview breakout strategies, and where all its main indicators are flashing green. All its components finished the session in the green, including health care stocks that had contracted in the US as a sector. The top performer was airplane engine maker MTU Aero Engines (Boeing was the top performer in the Dow), with airliner Lufthansa also a big outperformer as it announced an extensive restructuring. German data showed employment change worse than expected but services PMIs beating estimates slightly, as traders and investors alike gear up for today's ECB (European Central Bank) announcement where expectations are for increased easing.
IG client* and CoT sentiment for DAX
Retail short bias is back in heavier sell territory, and not far off extreme levels.
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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