Dow, Nasdaq and DAX point higher this morning
Risk-related assets continue to enjoy gains, CoT bias shifts to majority short in Dow while still in the middle for the Nasdaq.
Dow Technical analysis, overview, strategies, and levels
The Dow also lived up to volatile expectations with a surge to finish higher, and aid conformist breakout strategies sizably on both the Weekly and Daily on a breach of its key levels following expectations of a Biden win. As for Friday's slight retreat, by the close it was component Johnson & Johnson outperforming followed by Walmart, with UnitedHealth at the bottom retracing. (Component) McDonald's is set to release its figures next. Coronavirus cases and political news may continue to take the attention, with economic data out of the US mostly low-impacting until Thursday's CPI and unemployment claims figures.
IG client* and CoT** sentiment for Dow
CoT speculators didn't time this one right, shifting to a slight short 53% on a reduction in longs by 4,482 lots outdoing a smaller 1,429 lot reduction in shorts. As for retail traders, the bias has shifted from a slight long 54% at the start of last week to a majority short 64%.
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
Tech outperformed once again, registering larger gains for the week for the Nasdaq and taking its price well above last week's Resistance levels to aid volatility conformist strategies that gave breakouts the clear edge over reversals on both the Weekly, as well as the Daily on most days. In terms of component performance, Biogen was very much in the bottom on Friday after its Alzheimer's drug failed before the FDA panel (8-1 vote) contrary to rosier expectations, with EA also suffering following its earnings release and dividend announcement. As for US political expectations, while mixed control won't be confirmed until after January's Georgia runoff Senate elections, it's the expected case.
IG client* and CoT** sentiment for Nasdaq
In sentiment, there was little change on the CoT front in terms of positioning keeping the bias in the middle, while retail bias shifted from a majority long 62% at the start of last week to start this week off at a near exact opposite 61% short.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
The losses suffered the week before were nearly undone with last week's price surge, which took it back above all its main Weekly long-term moving averages (50, 100, 200-week) that are huddled together, and aiding conformist buy breakout strategies heavily on the increase in volatility for both the Weekly and Daily levels. Friday's slight red finish meant components were mostly in the red by the close with Daimler and Bayer in the bottom, and Deutsche Telekom and Heidelberg amongst the handful of exceptions posting a green finish. German economic data late last week showed factory orders and industrial production a slight miss, with trade released shortly after positive figures out of China.
IG client*sentiment for DAX
Retail bias has shifted here following the price gains from a majority long 63% to a majority short 57%. We don't get CoT figures for this index, but for the US indices they are majority long S&P and Russell, short Dow, and 50/50 Nasdaq.
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.
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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
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