Dow finishes opposite Nasdaq again, DAX retreats off the highs
US CPI the big focus for yields and tech, while the European Central Bank's meeting may keep European equities jumpy.
Dow technical analysis, overview, strategies, and levels
Third consecutive session of pullback for the Wall Street, though failing to reach its previous key levels in another session of limited momentum, its technicals remaining severely tested in this time frame as opposed to its longer-term weekly one. Health outperformed as a sector and put Merck ($1.2bn deal with US government for Covid-19 treatment), Johnson & Johnson (CEO saying people likely need additional doses of vaccine with annual flu shot for next several years), and Amgen on top, but most of its components were in the red with losses heaviest for Caterpillar (to increase dividend), Boeing, and Travelers.
There was little on offer in terms of US data, wholesale inventories rising 0.8% as expected. But that'll change today with the closely-watched CPI figures expected to show significant year-on-year growth, and unemployment claims likely to edge lower.
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IG client* and CoT** sentiment for the Dow
Retail bias is on the verge of shifting to majority long.
Dow chart with retail and institutional sentiment
Nasdaq technical analysis, overview, strategies, and levels
The tech sector barely finished in the green yesterday where health outperformed as a sector, and the index which includes both edged slightly higher though failed to offer a play, no doubt falling yields in the bond market a general positive and outperformance and opposite movement for the US Tech 100 compared to the Dow for three consecutive sessions.
Regeneron, Biogen, and Moderna enjoyed decent gains in a session that saw health enjoy the biggest gains, on the other end retreat off the highs for Sirius XM, NetEase, and Peloton.
In earnings, Adobe is expected to release its figures next. But the significant one to watch will be US CPI figures later today, especially given the effect it might have on yields in the bond market, a factor when it comes to growth stocks. Elsewhere, unconfirmed reports of antitrust drafts aimed at Big Tech.
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IG client* and CoT** sentiment for Nasdaq
Retail bias is majority long and opting not to close out buys on the price gains, rising to a slight buy 53%.
Nasdaq chart with retail and institutional sentiment
DAX technical analysis, overview, strategies, and levels
The pullback yesterday took prices of the Germany 40 briefly below its short-term bull trend channel. Though the process generally gave conformist buy-on-reversal strategies off of its previous first support the relative advantage as the key level held, in the process testing its technicals on the short-term daily as its price went below a couple of its main short-term moving averages on this time frame, its price still relatively close to the highs keeping its weekly overview more bullish even when factoring in how much it has been stalling.
Medical outperforming meant Merck and Fresenius were the components on top avoid a negative finish, but most were in the red with heavier losses for Covestro and Deutsche Bank. German trade was near estimates with an improving surplus, the 30-year bond auction showing an unchanged bid-cover ratio. The European Central Bank is the big event for the bloc today.
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IG client* sentiment for the DAX
Retail bias is still majority sell but has dropped from a heavy sell 73% to 64%.
DAX chart with retail 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 for the outer circle. Inner circle is from the previous trading day.
**CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior.
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