DAX surge takes retail short bias to near extreme levels
Dow Technical analysis, overview, strategies, and levels
Despite woes on the domestic front and ISM's (Institute for Supply Management) manufacturing PMI (Purchasing Managers Index) figure worse than expected, the Dow suffered only a slight drop in yesterday's session. [shares:BA-US|Boeing] outperformed posting the biggest gains, while Pfizer suffered 7% losses after it reported disappointing results on one of its cancer drugs. Only health care stocks as a sector were in the red, the rest of the US sectors finishing higher with real estate and energy leading the gains. There have been unconfirmed reports that China has asked state companies to halt US agricultural purchases, which would exacerbate relations between the two strategic competitors. In economic data, we've got auto sales tonight before attention in the US shifts to employment data with ADP tomorrow, unemployment claims on Thursday, and Non-Farm Payrolls on Friday.
IG client* and CoT sentiment for Dow
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
The Nasdaq managed to finish the session only slightly higher following what was a rangebound session, and amongst its components Tesla and hotel chain Marriott were the top performers with 7%+ gains, the latter saying it had reopened all its hotels in China and was seeing demand pick up in the US. But there were plenty in the red including Gilead Sciences in the very bottom after the latest data on its remdesivir coronavirus drug. Zoom will be releasing its figures today, but when it comes to the index risk appetite and fundamental factors will likely take center stage.
IG client* and CoT sentiment for Nasdaq
In sentiment, retail short bias has dropped in the Dow given there was a partial retracement aiding shorts into closing out. Here, it has risen instead to a heavy short 71% on a lack of retracement as more fresh shorts initiate at the short-term resistance level.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
It may have been a bank holiday yesterday for Germany, but the DAX enjoyed a surge to fresh highs to keep its bull trend daily technical overview intact, nearly reaching its Weekly 1st Resistance level (where the weekly overview is volatile) in the process. German manufacturing data out of Markit showed a slightly worse than expected sub-50 contractionary reading of 36.6, and the next item will be tomorrow's employment and services data.
IG client* and CoT sentiment for DAX
The surge here was highest, and that in turn has meant range-trading shorts are getting stuck while fresh longs continue to close out, taking retail short bias closer to extreme short levels. It was 68% yesterday morning, and today stands at 74%.
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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