Mixed performance for Dow and Nasdaq, DAX finishes higher
Retail sell bias jumps to near extreme sell levels in the DAX following the price gains.
Dow technical analysis, overview, strategies, and levels
While buy-breakout strategies might have relatively outperformed for short-term profit taking as its previous first resistance level got breached, most of its gains couldn't stick, a positive DMI cross occurring and with its price so close to the highs, keeping a couple of its technical boxes positive. Energy outperformed as a sector and put component Chevron amongst the outperformers, financials like Goldman Sachs, American Express, and JPMorgan also on top.
Johnson & Johnson and Amgen were the underperforming components. As for US data, manufacturing PMIs out of ISM and Markit showed ongoing growth and beat their respective estimates, the former's pricing and new orders components still high while a real miss on employment, the sector mentioning "wide-scale shortages of critical basic materials, rising commodity prices, and difficulties in transporting products" as they struggled to match surging demand.
IG client* and CoT** sentiment for the Dow
Dow chart with retail and institutional sentiment
Nasdaq technical analysis, overview, strategies, and levels
Plenty of volatile intraday moves, but that were relatively tamed as they stayed within its previous key levels and in turn a lack of a play for both conformist and contrarian strategies, a rise in yields a bit of a dent for the tech-heavy index. Chinese companies that included JD.com and Baidu were clear outperformers, decent gains for Marriott and Dollar Tree (Morgan Stanley analyst maintaining a hold rating on a target above current price).
The same couldn't be said for Ross Stores in the bottom, Amgen (despite buy ratings and the FDA approval of its lung cancer drug) and Adobe also suffering. In earnings amongst its components, Zoom beat estimates across the board, its share price settling higher in after-hours. Splunk is up next expected to release its figures.
IG client* and CoT** sentiment for Nasdaq
As for sentiment, a relative lack of change in price by the close has done little to move retail bias, still majority long and a notch higher at 60%.
Nasdaq chart with retail and institutional sentiment
DAX technical analysis, overview, strategies, and levels
A volatile move for the DAX, and (as with the FTSE) giving contrarian breakouts the edge, with a move beyond its previous first Resistance level as its second level held, a positive DMI cross occurring and its price above most of its main moving averages, the added positive technical bias putting it more in line with its weekly technical overview that's a bull trend stalling heavily at the highs.
German data beat expectations on the employment and manufacturing fronts, Markit's PMI for the manufacturing powerhouse above that of the bloc. As for component performance, auto stocks were relatively on top with sizable gains for VW, BMW, and Daimler, only a few in the red suffering minimal losses. We'll get retail sales shortly expected to show contraction after the previous (and strong) 7.7% reading.
IG client* sentiment for the DAX
Retail bias here has pushed back closer towards extreme sell levels following the price gains, at 76% heavy short as of this morning.
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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