Fed announcement sends Dow, Nasdaq and DAX higher

Dow Technical analysis, overview, strategies, and levels

Volatile movement yesterday that offered a conformist buy-on-reversal on the Weekly 1^st Support level, with the US Federal Reserve's (Fed) announcement of its start to purchase investment grade bonds today, and where it could purchase directly from issuers in the future. The net result was a buy everything moment in the financial markets that sent riskier assets higher, and the Dow finished higher after suffering losses earlier in the session. While there were a handful of underperformers including energy giant Chevron and pharmaceuticals' Merck and Pfizer, the outperformers outnumbered them with the gains larger for Goldman Sachs and American Express, and largest for Raytheon after it secured a big contract. All US sectors finished higher with the gains insignificant for energy and health care and largest for financials.

IG client^* and CoT sentiment for Dow

In sentiment, retail bias has shifted at last, from a slight majority short 53% yesterday to a slight majority long 51% as of this morning.

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

After suffering losses early on in yesterday's session, the Nasdaq managed to retrace from above yesterday's Weekly 1^st Support level to undo a bigger chunk of last Thursday's losses. Amongst its components, Tesla outperformed with a near 6% increase, while underperformers included hotel chain Marriott, and Adobe. From a technical standpoint, its bull trend channel and line while briefly broken have managed to hold thus far, and most of its main technical indicators remain bullish ahead of tonight's retail data and testimony from the Fed's Powell.

IG client^* and CoT sentiment for Nasdaq

Unlike the Dow where the bias has shifted to majority long as the larger plummet there gave a chance for retail shorts to close out, they remain majority short here albeit moving closing to the middle and at 55% as of this morning.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

The DAX has enjoyed big moves following yesterday's improvement in liquidity and risk appetite, allowing its price to retrace prior to reaching yesterday's Weekly 1^st Support level to cross and close above the last of its main moving averages (MA), the 200-day MA. By the close gainers included Wirecard and VW outperforming (despite an internal newsletter for the latter that said the car giant expects a very bad second quarter), and where airliner Lufthansa was at the very bottom. ZEW economic sentiment figures will be released today for the Eurozone and Germany. There will also be CPI (Consumer Price Index) and WPI (Wholesale Price Index) figures for the manufacturing powerhouse where expectations are for both to register negative readings.

IG client^* and CoT sentiment for DAX

In sentiment, retail bias was in the middle at the start of the week, and has tilted slightly to a slight majority short 51% bias as of this morning.

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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