CoT long bias rises in Nasdaq, remains majority short Dow

Dow Technical analysis, overview, strategies, and levels

It was a powerful finish to the week for the Dow, crossing and finishing above the last of its main moving averages, the 50 and 100-week on the Weekly chart (and the 200-day on the Daily). Nearly all its components outperformed with Boeing gaining the most with double digit percentage gains, and light losses for only Pfizer and Walmart. Energy as a sector gained the most by a healthy margin, followed by financials and industrials. That aided conformist buy breakout strategies on both the Weekly and Daily to keep its bull trend technical overview intact, even if it had been stalling prior. A surprise increase in NFP (Non-Farm Payrolls) out of the US aided sentiment at the end of the week.

IG client^* and CoT sentiment for Dow

The latest moves have been opposite traders holding a heavy short bias of 69%, with CoT (Commitment of Traders) speculators upping their bias a notch on an increase in Dow shorts by 2,525 lots outdoing a smaller increase in longs by 855 lots.

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

Fresh highs for the Nasdaq to keep its bull trend technical overview intact on both the Daily and Weekly charts, even if its price didn't reach either of its key Weekly pivot points last week, and aiding conformist Daily buy breakout strategies on Friday. Most of its components finished higher on Friday, but there were plenty of health companies in the red including Gilead Sciences, Regeneron, BioMarin and Vertex Pharmaceuticals.

IG client^* and CoT sentiment for Nasdaq

The gains here have also tested retail traders who have upped their majority short bias further, from 67% at the start of last week to 70%. However, unlike the Dow and S&P 500 where CoT speculators continue to hold a majority short bias, sentiment here is majority long and rising, with a reduction in shorts by 1,873 lots and long positions largely unchanged taking the percentage bias to a healthier 55%.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

Massive gains for the DAX last week, rising more than 10% and more than aiding conformist buy strategies as its price breached its key resistance levels on the Weekly with ease. On the Daily, Thursday's buy-on-reversal and Friday's buy breakout strategies were also the outperforming strategies conforming to its current bull trend technical overview. On Friday, most of its components finished in the green with big gains for Continental, Daimler, and MTU Aero Engines. Real estate Vonovia, utility RWE, and personal-care products Beiersdorf were the only ones finishing in the red. The catalyst here was on two fronts, with a big German stimulus package as well as ECB (European Central Bank) easing meaning both fiscal and monetary policy are in full swing.

IG client^* and CoT sentiment for DAX

As for trader sentiment, retail bias is in heavy short territory squeezed by the latest moves as longs continue to get enticed into closing out.

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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