Dow, Nasdaq and DAX tested on rising risks
Plenty of Fed speak this week in the absence thus far of any fiscal stimulus for the US, while tech focus is on Tesla’s event tomorrow.
Dow Technical analysis, overview, strategies, and levels
Conformist buy technical overview strategies were tested last week on both the Daily and Weekly as the Dow's price ended the week close to where it started, testing longs later in the week on the retreat. Only a few of its components finished higher on Friday, including Johnson & Johnson and Merck, the losses heaviest for Boeing, Apple, and IBM. All US sectors finished in the red, with defensive real estate and utilities suffering the biggest percentage losses. US data was worse than expected for unemployment claims, building permits, housing starts, and its current account. Only preliminary UoM consumer sentiment managed to beat estimates. We've got Fed speak later today, and in fiscal stimulus there haven't been any significant updates, the attention politically on the Supreme Court.
IG client* and CoT** sentiment for Dow
There's been little change on the CoT speculator front, still holding a majority sell bias far higher than that of retail traders who are closer to the middle.
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
Volatile moves for the tech-heavy Nasdaq last week, undoing gains to break beneath its short-term support level and breaking beneath Daily 1st levels for moves towards (and in some cases) beyond 2nd levels. While the overview is stalling heavily on the Weekly, the Daily has turned more volatile with a couple short-term technical indicators turning red and a negative DMI cross. The losses on Friday in terms of share price were heavy for Incyte, Intuitive Surgical, and Qualcomm, with Tesla the outperformer ahead of tomorrow's 'Battery Day'. That aside, the FT reported over the weekend that the EU was planning to gain new powers in dealing with big tech companies which includes forcing them to break up, selling off their European operations if their market dominance threatens consumers and smaller interests, or exclude them altogether from the market.
IG client* and CoT** sentiment for Nasdaq
In sentiment, CoT speculators have surged to heavy sell.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
Little action for traders in the DAX on a lack of significant movement, staying well within its Weekly levels and offering little of a play on the Daily. The fact that it has avoided the retreat witnessed in tech stocks have meant its key indicators in the short-term Daily are a bit more positive, but overall clearly its bull trend technical overview stalling heavily and needing little to shift to a more consolidatory overview befitting recent moves. There weren't a lot of components finishing higher on Friday, with Covestro, Merck and Bayer amongst the few on top. Continental, VW, and MTU Aero Engines suffered relatively heavy losses. Rising coronavirus cases in Europe are of concern, and in economic data German PPI figures on Friday were unchanged.
IG client* and CoT** sentiment for DAX
As for sentiment, smaller price changes here can still cause big moves in sentiment, with the majority sell bias amongst retail traders dropping from 67% at the start of last week to 60%.
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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