Nasdaq retreats, futures point lower on tested Asia session
Retail shorts unwind in Dow and Nasdaq, still stuck in DAX.
Dow Technical analysis, overview, strategies, and levels
The Dow finished the session close to where it started following oscillations that flirted with higher highs and intraday lower lows, with neither of its key pivot points reaching. In earnings amongst its components, Goldman Sachs and its reliance on trading helped it beat Q2 earnings forecasts, and so did UnitedHealth reiterating its full-year profit guidance even as it suffered from an 'unprecedented' period of deferrals on the postponement or cancellation of elective surgeries. Johnson & Johnson will be releasing its figures today, with non-component financial institutions including Bank of America releasing their results as well. US manufacturing data beat expectations across the board yesterday, and today we'll get more of it out of the Federal Reserve Bank of Philadelphia, as well as retail data and unemployment claims. US-China tensions have failed to subside, and the Asian session is tested this morning despite better than expected Chinese GDP data.
IG client* and CoT sentiment for Dow
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
The Nasdaq underperformed compared to the Dow again, its price recovering off of yesterday's 1st Support level to aid conformist strategies significantly, with futures moving back lower this morning. By the close, semiconductor ASML was hit hardest following its earnings miss despite better than previous figures, with Amazon and Nvidia amongst those in the bottom. Expedia and Marriott who are usually prone to more volatility on coronavirus news outperformed significantly during the session. The big one in terms of earnings for the index's component is Netflix today, a part of the closely watched and sought after FAANG (Facebook, Apple, Amazon, Netflix, Google/Alphabet) stocks whose share price recently made fresh record highs.
IG client* and CoT sentiment for Nasdaq
The retracement here has given a chance for shorts to close out, with the majority sell bias dropping to just 55% from 59% yesterday.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
Although the DAX finished higher, the gains were short-lived land as of this morning futures are pointing lower, with Chinese shares hit hardest in the Asian session. Overall, its price oscillating near the highs and failing to reach either of yesterday’s key pivot points. By the close, as with airplane related stocks globally, MTU Aero Engines outperformed amongst its components, with Wirecard at the very bottom and once again experiencing the most volatility. As much as it'll be a significant two days for the euro, the same holds true for the German DAX given the ECB (European Central Bank) will be announcing its monetary policy today, and EU leaders are expected to meet tomorrow regarding the bloc's long-term budget and a massive €750bn coronavirus recovery fund.
IG client* and CoT sentiment for DAX
Retail traders are hoping for downside movement in this index, as heavy short bias has gotten heavier rising to 76% and not far off from extreme sell levels.
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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