Dow, Nasdaq and DAX suffer lower finish
Majority short retail bias drops in all three as fresher averaged-in and range-trading shorts take profit.
Dow Technical analysis, overview, strategies, and levels
With the Dow's price breaking beneath its bull trend channel, there's little needed here to shift its technical overview, even if its price failed to reach the lower pivot points. In earnings, Coca-Cola was above estimates while insurance company Travelers was lower due to higher catastrophe losses, and up next we'll get Delta Airlines and Spirit Airlines (neither are components of the Dow but will give an indication to the airline industry during the coronavirus storm). All its components were in the red yesterday with the losses led by Merck and airplane maker Boeing. Overall US sector performance showed tech losing out the most, with defensive utilities and real estate suffering a less harsh fate. In political news, Congress passed another $484bn package that will include business loans.
IG client* and CoT sentiment for Dow
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
The Nasdaq was in for significant retreat yesterday as the tech sector underperformed, taking its price back below its 100-day moving average and testing its bull trend channel that's barely holding, but aiding conformist buy-on-reversal strategies as its price recovered off of yesterday's 1st Support level. In earnings, the focus was on Netflix which showed an unsurprising increase in subscribers by 15.7m globally, its share price briefly rising in after hours. Its revenue and earnings were both below expectations despite the increase in subscribers due to a stronger US dollar and costs involving pausing productions. As for the remaining components, only a couple finished in the green with Tesla near the bottom down almost 8%.
IG client* and CoT sentiment for Nasdaq
But retail traders aren't complaining, with averaged-in shorts unwinding and taking majority short bias down to 55% from 64% yesterday.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
The German DAX wasn't spared the equities retreat yesterday, finishing lower but failing to aid neither conformist nor contrarian strategies as its price reached just above its 1st Support level before retracing back up. Amongst its components, nearly all were in the red with heavy losses for SAP following its Q1 earnings miss, and where VW and airplane engine maker MTU Aero Engines suffered bigger percentage losses. More rangebound activity as of late has continued to test its current stalling bull trend technical overview where most of its indicators are now neutral and a non-trending ADX (Average Directional Index) on the daily (as opposed to the weekly).
IG client* and CoT sentiment for DAX
Here too retail short bias is dropping as range-trading shorts get out, and taking the bias back down to 54%.
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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