Dow, Nasdaq and DAX finish lower
Shorts unwind heavily in Dow and DAX as majority short bias drops, still in heavy sell territory for tech-heavy Nasdaq on lack of significant retracement.
Dow Technical analysis, overview, strategies, and levels
A breather for indices yesterday, with the Dow moving back beneath its 200-day moving average but failing to reach either of its key pivot points. Amongst its components, only Walmart and Proctor & Gamble managed to finish higher (the former's share price surging on a report that it'll release an Amazon Prime competitor this month), while the losses heaviest for Boeing (which settled nearly all Lion Air crash claims), Goldman, and American Express. As a result, only consumer staples as a sector finished higher, the rest in the red where energy and financials suffered the most. US coronavirus cases have topped three million as another stimulus package may be released.
IG client* and CoT sentiment for Dow
And for traders, it did offer a chance for fresher shorts to close out with retail bias dropping from 59% yesterday to a slight majority short 52% as of today morning, and not that far off from shifting to majority long should we witness a significant price drop.
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
Neither of the Nasdaq's key pivot points reached yesterday as its price posted a fresh intraday high before retracing to close lower. Outperformers amongst its components included pharmaceuticals' Vertex and Regeneron, as well as wholesaler Costco. Paychex underperformed, its profit and revenue dropping but beating estimates.
IG client* and CoT sentiment for Nasdaq
Unlike in Dow and DAX where retail bias has dropped significantly on yesterday's moves, most of the short positions here have been initiated at lower price levels, and in turn its bias dropped only a couple notches to a majority short 70% and is the only index here where the bias is in heavy sell territory.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
Despite the price drop, conformist buy-on-reversals outperformed here on a couple occasions as yesterday's 1st Support levels partially held twice before breaking. As always, its most volatile component was Wirecard, this time around its share price at the top in terms of component performance. That aside, Merck outperformed, while most of its components finished lower with Bayer, adidas, and airplane engine maker MTU at the bottom (Deutsche Bank dropped more in after hours, fined $150m over Epstein links). As for earnings, preliminary Q2 results for Deutsche Post beat expectations.
IG client* and CoT sentiment for DAX
As with the Dow, the retracement has offered a chance for fresh (and averaged-in) shorts to close out, taking yesterday's heavy short 66% bias to a more moderate 59% as of this morning.
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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