Dow enjoys its best week in decades

Dow Technical analysis, overview, strategies, and levels

Recovering off the lows, it was a significant week for the Dow, finishing well above last week's Weekly resistance levels and just shy of its 200-week moving average buoyed by expanded central bank easing despite and opposite clear fundamental worries. As for its components towards the end of the week, JPMorgan Chase outperformed while near the bottom were energy giants' Chevron and ExxonMobil. Energy was the only sector in the red, the rest expanding late last week with financials and real estate leading the way.

IG client* and CoT sentiment for the Dow

CoT (Commitment of Traders) speculator bias recently shifted to majority short, but since then the bias has dropped on an increase in consolidated Dow longs by 1,963 lots outdoing a smaller increase in shorts by 200 lots. Retail longs have been getting out on the move higher, with short bias starting the week in heavier territory at 73%.

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

While the Nasdaq didn't outperform in percentage terms compared to the Dow, its price also breached last week's 1^st Resistance level, and crossed back above both its 50-week and 100-week moving averages. Amongst its components late last week, American Airlines outperformed, while at the bottom included Citrix Systems and Micron Technology.

IG client* and CoT sentiment for Nasdaq

In sentiment, larger speculative traders remain majority short in the Dow and S&P, and while they've reduced long positions in the consolidated Nasdaq by 766 lots and increased shorts by 711 lots, overall the bias is still majority long at 57% and opposite retail bias at a majority short 60%.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

It was also a significant week for the German DAX, finishing higher thanks mostly to last Monday's surge, and in the end aiding conformist breakout strategies as its price pierced last week's Weekly 1^st and 2^nd Resistance levels. Amongst its components, Airplane engine maker MTU Aero Engines outperformed last Thursday, and only Siemens was in the red. In German data, its trade surplus rose and beat expectations, a theme that could persist given manufacturing now has the relative edge over the services sector. Should further risk-on (or buy everything) moves persist, and more upside bias is likely thanks to central bank easing and running contrary to current economic woes.

IG client* sentiment for the DAX

In sentiment, retail bias started off last week with a slight short 53%, but ended in heavy short territory at 69%.

DAX chart with retail 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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