Strong NFP report takes Dow, Nasdaq, and DAX higher on Friday, but finishing the week in the red

Dow Technical analysis, overview, strategies, and levels

Very few of the Dow's components were in the red last Friday, as the move higher undid much of the losses experienced earlier in the week. Energy as a sector outperformed after OPEC+’s announcement, followed by financials and industrials. The results have kept its stalling bull trend technical overview intact for the time being, as we enter a crucial week for risk appetite as the December 15^th deadline on US tariffs fast approaches.

IG client and CoT sentiment for the Dow

Retail bias is unchanged for the week after dropping mid-week on short profit-taking, and is out of the extreme short territories witnessed not too long ago. It still stands in opposite contrast with CoT (Commitment of Traders) bias, at a heavy long 76% but dropping 3% on the week before’s extreme long 79% bias.

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

While there was some recovery on Friday as riskier assets were in high demand following a stronger than expected US NFP (Non-Farm Payrolls) report, the Nasdaq ended the week slightly in the red. Trade talk matters for US companies in general, and it will matter significantly to tech giants worried over talk of a digital tax entertained by foreign governments, and where any worsening of the trade environment making the tech sector a possible casualty.

IG client and CoT sentiment for Nasdaq

In terms of sentiment, retail bias has dropped from last week’s extreme short 77% but remains in heavy short territory and still prone to a squeeze should fresh record highs be made. As for CoT bias, it is also dropping towards the middle though far lower than that held by Dow CoT speculative traders.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

The German DAX’s bull trend technical overview continues to get tested, with a brief scare early last week that certainly aided retail short positions in closing out, and where the extreme short bias of 78% dropped to 73% at the start of this week. On the daily technical overview, it’s on the verge of shifting to a more consolidatory outlook, but on the weekly more will be needed to break its mid-term bull trend line ahead of this Thursday’s ECB (European Central Bank) meeting whereby monetary easing policies set by Lagarde’s predecessor have aided riskier asset prices.

IG client sentiment for the DAX

DAX chart with retail sentiment