Dow hits fresh record highs while the Nasdaq partially recovers

Dow Technical analysis, overview, strategies, and levels

Fresh record highs for the Dow on expectations of ongoing monetary easing out of the US central bank following last Friday’s disappointing jobs report, and with a lot more momentum in price action this time around to aid conformist buy breakout strategies in both time frames, all its technical boxes flashing green on the Daily.

Consistency in achieving those results will be another matter, the question of whether we're back to slow upside movement, narrow oscillations, or a downside short-term volatile dip that thus far has been picked up by investors and traders alike. Nike and Boeing relatively outperformed by the close, IBM and Verizon amongst the few of its components suffering losses in a Friday session that saw all sectors in the green.

There isn't much on offer today with Fed speak, plenty more of it tomorrow before Wednesday's consumer price index (CPI).

Traders were caught on the wrong end of the latest moves, retail bias starting the week in extreme sell territory while CoT speculators are slight sell 54%.

Nasdaq Technical analysis, overview, strategies, and levels

Although it was a red week for the Nasdaq and in turn one where it failed to reach fresh record highs, the losses were relatively minimal, conformist strategies tested on the Weekly’s bull trend overview as prices briefly went past its previous 1st Support level, while the short-term Daily volatile overview gave conformist buy-breakouts the edge on a breach of its previous 1st resistance level, a positive directional movement index (DMI) cross occurring in that time frame.

Most of the technical boxes for both time frames are neutral, prices above long-term moving averages and combined with a trending ADX. Ross Stores, Cintas, and Marriott (who will be releasing their earnings today) relatively outperformed, losses big on the other end for Monster Beverage (earnings miss).

As for sentiment, CoT sell bias might be dropping in the Dow, but it has risen here to 56% on a rise in shorts by $2,73 lots outdoing a $921 lot increase in longs. Retail bias is an opposite majority long 60%.

DAX Technical analysis, overview, strategies, and levels

The DAX was no exception to a generally strong week for indices, keeping its technicals relatively positive and aiding conformist buy strategies on its previous Weekly 1st Support level holding, while testing conformist breakout strategies on the volatile Daily technical overview on the initial lack of follow-through on Thursday, though more than making up for it on Friday with a positive DMI cross occurring in that time frame.

Adidas (sales and profit beat estimates) was the component outperforming by a clear margin, Delivery Hero (2021 outlook) and MTU Aero Engines also enjoying decent gains. The same couldn't be said for Heidelberg cement which suffered the most amongst the few of its components finishing in the red. German economic data late last week showed factory orders easily beat estimates, industrial production grow, while its trade surplus narrowed and was a clear miss.

Following the price gains, retail bias is just shy of extreme sell territory at 76% and far higher than the start of last week’s 61%, and of the six indices (Dow, Nasdaq, S&P, FTSE, DAX, ASX, it's only the Nasdaq where retail bias is majority long. We don’t get CoT bias for the DAX, but for US indices they are majority sell Dow, Nasdaq and Russell, while slight buy S&P.

*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.

Be sure to request IG’s Weekly & Daily Market Report when you open an account with IG Dubai and get access to the full information on the FX majors, commodities, indices, and Bitcoin.