CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Lack of action for Dow and Nasdaq ahead of significant US data

Retail bias remains majority sell Dow and DAX, opposite majority buy for the tech-heavy Nasdaq.

Dow technical analysis, overview, strategies, and levels

Hardly a play for most indices in this report, for the Wall Street opting to remain within ranges but giving traders a slight green finish to aid its stalling technical overview. Energy was the sector outperforming once more, and meant component Chevron was nearly on top, Walgreens and Visa also enjoying a decent session. Dow, Disney, and Honeywell were in the bottom.

There wasn't much US data to go on, vehicle sales data out of Wards dropping while economic optimism out of TIPP beat estimates, the Fed's Beige Book highlighting ongoing economic growth but rising costs and labor shortages, and in Fed speak (non-voting member) Harker the latest to consider tapering asset purchases, the central bank to wind down corporate bond holdings. Clear focus on employment data today and tomorrow, and big potential moves on Friday's NFP.

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IG client* and CoT** sentiment for the Dow

Going into the event both retail and CoT speculators are majority short, the bias amongst the former dropping to 55%.

Dow chart with retail and institutional sentiment

Nasdaq technical analysis, overview, strategies, and levels

A lack of a play here as well as prices remain rangebound for US Tech 100, even if technicals point to an eventual break, the movement lower in yields helping the tech sector relatively outperform, and giving the tech-heavy index a green finish. eBay and Nvidia were the components enjoying big gains, with losses on the other end for Align and Tesla, both JD.com and Baidu in partial retreat on gains made earlier in the week.

As for earnings, Broadcom, DocuSign, and lululemon are the components expected to release their figures next, Splunk in retreat in after-hours on losses that were bigger than expected, even if revenue beat forecasts. Fed speak today and tomorrow, though employment data via Non-Farm Payrolls and its effect on future Fed policy (and in turn, tapering talk and yields) are items to note.

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IG client* and CoT** sentiment for Nasdaq

Meanwhile, retail trader bias is little changed on the relative lack of change in price, and still at majority buy levels.

Nasdaq chart with retail and institutional sentiment

DAX technical analysis, overview, strategies, and levels

Little action for Germany 40 and in turn a lack of a play, but finishing higher and shifting its short-term technical overview to make it in line with its weekly technical overview of a stalling bull trend.

That doesn't mean buy-breakouts will outperform by default, as a brief glance at the daily chart and its clear there have been plenty of sessions where downside movement or reversals off of key levels enjoyed bigger gains, the spikes higher occurring only in a few crucial sessions. Decent gains were in store for auto companies again putting VW and BMW easily in the category of components finishing in the green, the losses on the other end heaviest for Siemens, Delivery Hero, and Deutsche Wohnen.

As for German data, retail sales was a miss with a -5.5% reading, services PMI the next item today likely to show growth with an above-50 but moderate reading.

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IG client* sentiment for the DAX

As for sentiment, retail sell positions were tested on the upside moves, and the bias is still in heavy short territory.

DAX chart with retail 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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