Dow, Nasdaq and DAX little changed for the week
CoT speculator bias remains majority short Dow and Nasdaq, retail sentiment mixed.
Dow Technical analysis, overview, strategies, and levels
Slight lower finish for the week that stayed well within Weekly levels but broke through the Daily 1st Support level on Thursday. Only a few outperformers by the close on Friday, with Nike, 3M and Travelers avoiding a price drop, and where Boeing, Salesforce, and Visa underperformed. A restart in stimulus talk, rising coronavirus cases in the US, and the Fed-Treasury spat have been items to note when it comes to the US market. As for US data, unemployment claims disappointed, existing home sales surged to levels unseen since 2006, and Philly Fed's manufacturing beat estimates. Today's data is about preliminary manufacturing and services PMIs, expected to show growth for both sectors with above-50 expansionary readings.
IG client* and CoT** sentiment for Dow
In sentiment, CoT short bias amongst speculators has risen to 54% on a reduction in longs by 1,691 lots and a simultaneous rise in shorts by 207 lots, and is similar to that of retail traders.
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
Very narrow movement for the Nasdaq last week, opting to remain well within its key Weekly levels, and offering a buy-on-reversal off of its Thursday Daily levels. All US sectors save for utilities finished in the red, and a slight negative finish for the tech-heavy index on Friday. NetEase (earnings beat), MercadoLibre, and Micron were the relative outperformers by the close on Friday, while Workday was in the very bottom suffering near double-digit percentage losses on a worried outlook even as it beat estimates. Expect component Regeneron's share price to get volatile after the FDA issued emergency use authorization for its Covid-19 antibody therapy treatment.
IG client* and CoT** sentiment for Nasdaq
CoT speculators are still holding a majority short bias taking it up a notch to 56% on a slightly bigger reduction in longs than shorts, while retail traders are an opposite majority long albeit close to the middle.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
As with the other indices in this report, a week of rangebound movement where here it failed to offer a play on a lack of a move towards its Weekly nor Daily levels, its price holding near a mid-term resistance level. In terms of component performance on Friday, Bayer, RWE and Deutsche Post were on top, the minimal losses of the dozen or so in the red led by Covestro and Vonovia. German data was low-impacting late last week with PPI figures as expected rising 0.1%, with significant data today in the form of preliminary manufacturing and services PMIs from the Eurozone's manufacturing powerhouse.
IG client*sentiment for DAX
As for sentiment, retail bias has dropped and is out of heavy sell territory, and it's here and the Dow where retail traders are still holding majority short bias compared to the remaining five (S&P, FTSE, and Nasdaq). We don't get CoT figures for the Dax or FTSE, but for US indices they're majority short Dow and Nasdaq while long S&P and Russell.
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 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.
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.
Technical Analysis: MACD – webinar on January 26
This is an advanced webinar on MACD (Moving Average Convergence Divergence) which will cover the following topics:
- Mean reversion, trend following, and momentum based theories
- Breaking down each item of Moving Average Converge Divergence
- Triggers, frequencies, and signals
- MACD alone, with the price chart, and multiple time frames
- Mixing with fundamentals, range considerations
- MACD Divergence
- In conjunction with ADX, ATR, and comparing with RSI
Live prices on most popular markets