Risk-on move takes Dow, Nasdaq & DAX to a higher finish

Dow Technical analysis, overview, strategies, and levels

Although its price dropped earlier this morning, yesterday's risk-on move to start the week took the Dow towards a higher finish yesterday crossing above its 50-day moving average and keeping its stalling bull trend on the daily intact. Amongst its performers, Disney was on top, the handful at the bottom including Walmart, Boeing, and Proctor & Gamble. In earnings, Merck and Pfizer will be releasing their figures today. With more restrictions being eased in the US and the WSJ reporting that the big three US automakers aim to resume some production on May 18, focus has largely been on after Covid-19 even if global economies aren’t clear of the coronavirus storm just yet. We've got plenty of data today, though pales into comparison to tomorrow's data and US Federal Reserve (Fed) monetary policy announcement.

IG client^* and CoT sentiment for Dow

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

Nasdaq didn't outperform yesterday when compared to the Dow, but a higher finish has managed to keep its bull trend technical overview intact and within its bull trend channel on the daily chart despite a lack of pivot point action. Amongst its components, Tesla outperformed gaining more than 10%, but there were plenty slightly in the red including Amazon and Facebook. In earnings, Alphabet (Google) and AMD will both be releasing their figures today, and more will follow for its components (amongst whom are the tech giants) tomorrow and the day after.

IG client^* and CoT sentiment for Nasdaq

Retail bias here has also dropped, from a heavy short 66% at the start of the week to a majority short 61% as of this morning.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

The German DAX enjoyed big percentage gains yesterday following what has been mostly rangebound and limiting sessions, to briefly take its price above the Weekly 1st Resistance level before only partially retracing thus far. On the daily, its bull trend technical overview is the weakest of the three indices in this report, stalling at a short-term resistance level and just below its 50-day moving average. Amongst its components, most finished the session in the green with Deutsche Bank and airliner Lufthansa outperforming, the latter on hopes of state stimulus and the potential of further easing lockdown restrictions.

IG client^* and CoT sentiment for DAX

Range-trading is usually highest for this index amongst retail traders, and majority short bias has surged to a heavy short 67% on yesterday's increase alone.

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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