Volatility fails to subside in Dow, Nasdaq, and DAX
Long bias drops in all three following yesterday’s partial recovery.
Dow Technical analysis, overview, strategies, and levels
Yesterday's early moves higher took its price past yesterday's 1st Resistance level on more than one occasion and aiding conformist breakout strategies as well as contrarian reversals to finish the session up (even if today’s session is witnessing a clear undoing of those gains). That meant that its components finished in the green, with JPMorgan outperforming and Verizon gaining the least. Overall US sector performance put financials in the lead and utilities up only about 1%. A lack of US data yesterday, but we will get CPI (Consumer Price Index) figures this evening and PPI (Producer Price Index) tomorrow. On the fiscal front, although talks are set to begin on stimulus measures such as a payroll tax cut, the question of how much those could limit the damage remains yet to be seen.
IG client* and CoT sentiment for Dow
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
Compared to the Dow, the Nasdaq also enjoyed a recovery early on yesterday to briefly recover some of the losses made on Monday in a session that took its price past yesterday's 1st Resistance level twice but where contrarian reversals outperformed compared to breakout strategies on limited profit-taking. Amongst its components, American Airlines outperformed gaining 15% while there were a few in the red including travel site Expedia and Gilead Sciences at the bottom.
IG client* and CoT sentiment for Nasdaq
As with the Dow, the brief moves higher have aided longs into closing out and shorts into initiating, taking majority long retail bias 4% lower and on the verge of shifting to majority short.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
Deutsche Post reported its earnings yesterday, showing a record for 2019 and as such it outperformed amongst the DAX's components. But plenty were in the red yesterday with most auto shares registering a slight decline and Lufthansa failing to shake off consecutive losses thus far. Conformist breakout strategies also outperformed here, with a buy off yesterday’s 1st Resistance level making a move past its 2nd Resistance level. A dearth of German data today, with a 10-Year bond auction today expected to fetch ongoing negative yields even if the number of bids made per bid accepted have been dropping noticeably.
IG client* and CoT sentiment for DAX
Meanwhile, in retail sentiment, the bias amongst traders there has also dropped, from yesterday’s heavy long 69% to 61% as of today morning.
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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