Improved risk appetite powers Dow, Nasdaq, and Dax to a higher finish
All three continue to show a bull trend technical overview, though monetary intervention likely the catalyst for recent gains.
Dow Technical analysis, overview, strategies, and levels
Last week was a decent one for US indices, with the Dow registering fresh record highs despite news of a removal of tariffs between the US and China proving to be incorrect. Its price went beyond last week’s 1st Resistance level but not offering much beyond that, as overall the gains have still been relatively limiting when viewed intraday/intraweek. Friday’s outperformers included Microsoft and Disney, and ahead of the latter’s November 12 streaming launch data, while energy underperformed towards the end of the week. As for earnings, this week’s earnings will include Walmart.
IG client and CoT sentiment for the Dow
In sentiment, retail bias remains extreme short while Commitment of Trader (CoT) bias is a near opposite extreme long 81%, dropping a couple percent on an increase in short positions by 803 lots.
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
Fresh record highs last week for this index as well, but as with the Dow the gains have been limiting here for both intraday and intraweek, and making it difficult for buy breakout strategies reaching for limited profit-taking. Nearly all its main technical indicators on the daily and weekly continue to flash green, but both conformist and contrarian strategies are getting tested as pivot point trading remains difficult.
IG client and CoT sentiment for Nasdaq
Retail bias here is extreme short as well and little changed since the start of last week, while majority long institutional bias has risen a notch to 64% on a larger reduction in shorts by 838 lots compared to longs by 691 lots.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
While both Dow and the tech index posted relatively limiting gains in record territory, it was more sizeable gains for this index that went beyond last week’s 1st Resistance level, as nearly all its main technical indicators continue to flash green but where weekly pivot point trading for limited profit-taking (both to the upside and downside) has been more ideal.
IG client sentiment for the DAX
In sentiment, retail traders have upped their bias a notch to an extreme long 82%, squeezed on the way up as the bulk of those shorts have been initiated at far lower price levels.
DAX chart with retail sentiment
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