Risk aversion tests technical overviews of Dow, Nasdaq, and DAX

Dow Technical analysis, overview, strategies, and levels

While there's partial focus on earnings, the overall mood hasn't shifted following worries over the coronavirus. Yesterday's moves ensured its components were in the red, lead by intel, while few were in the green with Walmart at the top. As for sector performance, all of the key sectors were in the red, with energy leading the losses and even defensive sectors like utilities dropping albeit slightly. Apple will be announcing its earnings today and followed by other significant tech stocks over the next couple of days, shining light on the tech sector. US data such as durables and CB's consumer confidence will also be released today. Though its stalling bull trend technical overview gets severely tested (especially in the short-term on the daily overview), risk appetite is the key driver for equities at this stage.

IG client and CoT sentiment for Dow

CoT (Commitment of Traders) larger speculative traders may be complaining at this stage given their heavy long bias, but retail short bias is plummeting, down 10% here as averaged-in shorts get enticed into taking profit.

Dow 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

Nasdaq Technical analysis, overview, strategies, and levels

With stocks getting battered by the current coronavirus woes, the bulk of the Nasdaq's components were in the red with American Airlines at the bottom as airline stocks get battered. Earnings focus is shifting towards tech stocks, and in turn is likely on that front to affect the Nasdaq as a tech index. Apple will be releasing today, as will AMD and a string of other companies, and it'll be followed by companies such as Tesla and Microsoft tomorrow.

IG client and CoT sentiment for Nasdaq

Retail bias in Apple is at a majority long 60%, and the latest short interest figures out of nasdaq.com show a plummet in short interest by 28% over the course of last month. As for retail bias in the Nasdaq, it has dropped 7% to a heavy short 65% as shorts get enticed into closing out after what has been an excruciating rise against short positions over the past few months.

Nasdaq 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

DAX Technical analysis, overview, strategies, and levels

Even with the ECB's (European Central Bank) bond purchasing program forcing investors into riskier assets, the DAX couldn't weather yesterday's storm that sent equities plummeting, and the German index’s price crossing below its 50-day moving average. All of its components were in the red, with airline Lufthansa the second from the bottom. And it didn’t get better in terms of data either, as IFO figures showed worse than expected results for business sentiment, with GfK's consumer climate figure released tomorrow. A handful of German companies will be announcing their earnings today, though overall market attention is on the corona virus.

IG client and CoT sentiment^* for DAX

In terms of sentiment, the biggest change was witnessed here as short bias dropped a staggering 29% in this index from yesterday’s extreme short 82% to a slight short 53%, and is on the verge of shifting to majority long.

^* 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

DAX chart with retail and institutional sentiment