Daily Market Report: Dow, Nasdaq, & DAX
Gains in equities test majority short retail traders, sell bias rises in US Tech 100 and Germany 30
DOW: Equities end in the green but tech stocks outperform
The pair’s bull trend and channel are still holding, but clearly stalling at these levels and offering few (if any) decent buy breakout opportunities, and instead making contrarian strategies on reversals more attractive if the remaining earnings releases disappoint at all. The bias is conflicting with retail traders heavy short at 76% and institutional traders extreme long at 84%, with the former range-trading shorts awaiting retracement back down and the latter positioning for anticipated gains. The deal between the US President and Congress reached on increasing the government spending limit through 2021 is certainly positive news that’ll remove one key item of uncertainty out of the equation.
NASDAQ: Tech stocks outperform and keep the index’s stalling bull trend technical overview intact
While the Dow and S&P 500 both ended higher, the highlight was the Nasdaq which outperformed thanks to tech stocks. And with earnings season continuing, its tomorrow and the day after that’ll be closely watched given the earnings release of tech giants’ Facebook, Amazon, and Alphabet. From a technical standpoint it remains a bull trend that’s stalling at the highs, not unlike the Dow in failing to offer decent buy breakout opportunities with momentum limiting. Here too, the bias is conflicting but less extreme, with retail shorts rising 5% to a heavy short 74% and institutional bias majority long at only 60%.
DAX: Short bias rises on fades and range-trading ahead of Thursday’s ECB
For European equities, the focus is set on this Thursday’s ECB press conference to see if easing expectations can be matched given the current dovish economic outlook for the bloc. Meanwhile, the German 10-year has been moving back into heavier negative territories, as the hunt for yield gets tougher. From a technical standpoint, the overview remains consolidatory but showing a touch of positive bias with its price still above all its main long-term moving averages, and its weekly chart bull channel still holding. Retail bias has moved 8% higher to a majority short 58% as range-trading longs are quick to close out, while shorts fade the move anticipating retracement back down.
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