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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Dow, Nasdaq and DAX finish slightly higher but tested this morning

Lack of fresh trade news combined with insignificant data keep indices relatively range-bound.

Markets Source: Bloomberg

Dow Technical analysis, overview, strategies, and levels

Another day, another fresh record high for the Dow, and in this case keeping its bull trend technical overview intact where all its main technical indicators are flashing green. In terms of sector performance overall, consumer staples and real estate outperformed while energy was in the red, though given its been gain after gain those in the red didn't suffer heavily. In earnings, Home Depot will be releasing its figures with Lowes tomorrow, and there will be US housing data released both today and on Thursday.

Dow Technical Indicators Source: IG charts
Dow Technical Indicators Source: IG charts

IG client and CoT sentiment for Dow

The moves thus far haven't been in favor of retail traders, whose extreme short bias rose a notch to 82%, as nearly all of those shorts have been initiated at lower price levels, and hence are in desperate need of retracement back down to unwind those short positions in profit.

Dow sentiment Source: IG charts
Dow sentiment Source: IG charts

Dow chart with retail and institutional sentiment

Dow Source: IG charts
Dow Source: IG charts

Nasdaq Technical analysis, overview, strategies, and levels

As with the Dow, the Nasdaq too enjoyed fresh record highs, and in terms of performance both gained by 0.21% for the session, and where the tech sector finished slightly higher. Nvidia outperformed for the session, which posted fresh highs but also intraday lows. In all, nearly all its technical indicators are flashing green, with its ADX (Average Directional Index) showing an ongoing propensity to trend. However, limited intraday gains have meant buy breakout strategies haven’t panned out just yet, with liquidity lower above market price.

NASDAQ Technical Indicators Source: IG charts
NASDAQ Technical Indicators Source: IG charts

IG client and CoT sentiment for Nasdaq

Retail bias remains extreme short though has dropped a notch to 80%, and where as is the case with Dow and DAX the bulk of those shorts have been initiated at lower price levels.

Nasdaq sentiment Source: IG charts
Nasdaq sentiment Source: IG charts

Nasdaq chart with retail and institutional sentiment

Nasdaq Source: IG charts
Nasdaq Source: IG charts

DAX Technical analysis, overview, strategies, and levels

Compared to US indices that have been posting fresh record highs, the German DAX’s bull trend technical overview has been stalling heavily at current levels, and where auto shares within the index were mostly at the bottom in terms of yesterday’s performers. Out of Asia, it has been a slightly higher session this morning after yesterday’s move by the People's Bank of China to reduce its 7-day repo rate.

DAX Technical Indicators Source: IG charts
DAX Technical Indicators Source: IG charts

IG client and CoT sentiment for DAX

However, a lack of fresh highs has meant that retail traders have been averaging-in out of their positions, and extreme short bias has been slowly dropping as a result, standing at a heavy short 76% as of today morning.

DAX sentiment Source: IG charts
DAX sentiment Source: IG charts

DAX chart with retail and institutional sentiment

DAX Source: IG charts
DAX Source: IG charts
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This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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