Dow, Nasdaq and DAX in slight recovery this morning despite risk aversion
Bullish moves keeps its technical overview intact ahead of more earnings this week.
Dow Technical analysis, overview, strategies, and levels
Yesterday's early focus was on a reduction in risk appetite, but in earnings IBM's results were better than expected and its share prices have soared. As for yesterday’s close, the Dow’s components showed Boing at the bottom as airline stocks get hit and intel at the top ahead of its earnings release tomorrow, with focus for today on that of Johnson & Johnson. In sector performance, energy was heavily in the red as travel was in retreat, and so too were materials and financials while defensive utilities and real estate were in the green. Despite yesterday’s early plummet, a slight recovery has been underway this morning and keeping its bull trend technical overview intact. In sentiment, retail traders continue to hold a heavy short bias, with small price drops offering only fresh shorts a chance in unwinding in profit while the remainder await a larger retracement given where the bulk of those shorts have been initiated.
IG client and CoT sentiment for Dow
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
Yesterday's focus in tech was on Netflix's earnings result, which showed better than expected figures boosted by international growth despite a miss in domestic numbers but dropped forecasts for future subscriber growth. That kept its price volatile but eventually settling higher. As for the remainder of the Nasdaq's components, the top performers included Tesla at the top registering a +7% gain to reach a fresh record high and a stock market valuation that has crossed the $100bn mark. From a technical standpoint – and it means les given recent moves are risk-related – the overview for the tech index remains bullish on both the daily and weekly.
IG client and CoT sentiment for Nasdaq
As for trader bias, retail sentiment remains heavy short but (as has been the case with the Dow) has dropped from 75% to 72%.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
Will it or won't it has been the question for the DAX, as its price failed yesterday to successfully breach a significant resistance level, though with bullish moves early this morning aiding the German index. More positive technical bias has been building (and on the daily the overview is far more bullish but lacking intraweek momentum to aid buy breakout strategies on weekly pivot points), and on the fundamental front reinforced with better data as German ZEW figures yesterday beat expectations. The next main item will be tomorrow's ECB (European Central Bank) announcement where continuity in the current bond purchasing program will be crucial in forcing money out of bonds and into taking higher risks like equities in this index.
IG client and CoT sentiment for DAX
Retail bias was at an extreme long 80% and is unchanged as of today morning, as range-trading shorts await a retracement back down.
DAX chart with retail and institutional sentiment
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
See an opportunity to trade?
Go long or short on more than 17,000 markets with IG.
Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
