Dow outperforms, DAX and Nasdaq finish higher
Retail bias shifts back to majority short in the Dow as longs get enticed into unwinding.
Dow Technical analysis, overview, strategies, and levels
The Dow managed to undo Friday's losses, with a pending home sales surge following mixed results last week in the housing sector where existing home sales was a miss while new home sales was better than expected. All US sectors finished higher, the gains largest for industrials and communication while health care and financials registered the smallest percentage increases. Amongst its components, Boeing was the outperformer with double-digit percentage gains but dropping in after hours, as the airplane maker ended its first test flight for 737, and Norwegian Air cancelled 97 planes claiming compensation. This morning's passage in parliament of China's Hong Kong national security legislation could cause more friction between it and the US, and we've got the Federal Reserve's (Fed) Chair Powell testifying later today.
IG client* and CoT sentiment for Dow
In sentiment, the bias has shifted back to majority short from a previous majority long 56%.
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
The Dow outperformed compared to the tech-heavy Nasdaq, with the gains here keeping its bull trend channel intact. Those exposed to the hospitality and travel sector remained volatile, this time around the outperformers being Marriott and Expedia, with Tesla in third crossing back above 1,000 with a leaked email from its CEO saying that 'breaking even is looking super tight'. In afterhours, Micron's share price surged following its earnings beat. Plenty of Nasdaq's components finished in the red though, the losses largest for pharmaceuticals' BioMarin and Alexion, as well as Take Two. In coronavirus news, Arizona is the latest state to roll back reopening plans, though with worsening figures stimulus hopes will rise, making comments tonight from Fed Chief Powell all the more noteworthy.
IG client* and CoT sentiment for Nasdaq
In sentiment, shorts haven't been as quick to reinitiate this time around in the Nasdaq, and as a result yesterday's gains has only taken majority short bias up to 56%.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
The DAX wasn't left out of yesterday's risk-on moves, with the gains taking its price back above the last of its main long-term moving averages, the 200-day MA. Wirecard remained the most volatile amongst its components, and given how low its share has plummeted to any small gains has translated into massive percentage changes, as a result more than doubling in yesterday's session. The insolvent payment processor's share price aside, Deutsche Bank and Covestro outperformed, the handful of stocks finishing in the red including defensive utility RWE and real estate Deutsche Wohnen. German preliminary CPI (Consumer Price Index) beat expectations yesterday and shrugged off the month before's contraction, and this morning's Chinese PMIs (Purchasing Managers Index) out of CFLP were better than expected and expansionary.
IG client* and CoT sentiment for DAX
The 2% price increase has translated into a big jump in retail short bias, rising from 51% to 59%.
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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