Dow, Nasdaq, and DAX finish higher

Dow Technical analysis, overview, strategies, and levels

The Dow was in for big gains yesterday befitting its current volatile technical overview and giving preference for buy breakout strategies over contrarian reversals. Whether the catalyst was a recovery following a big move lower, Biden’s victory on Super Tuesday in the democratic primaries over Sanders aiding healthcare stocks like UnitedHealth which outperformed, or fiscal funding for the coronavirus, the net result has been the difficulty of pricing the current unknowns as California declares a state of emergency. Amongst the Dows components, all were in the green, with Boeing at the bottom gaining the least. As for overall US sector performance, utilities and consumer staples won big while energy gained the least ahead of OPEC+ meetings.

IG client^* and CoT sentiment for Dow

Retail bias has shifted once again, from a majority long 58% yesterday to a majority short 62% today.

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

Not so much as the Dow, but the Nasdaq was also in for big gains yesterday befitting its current volatile technical overview, with most of its components in the green with big gains registered for pharmaceutical companies as the health care sector outperformed following Super Tuesday’s results. At the bottom only two were in the red, Fox and Dollar Tree. In economic data, ISM’s services PMIs (Purchasing Managers Index) posted a better than expected expansionary reading, and although its mostly low-impacting data out of the US today that will likely result in little changes given the focus on the coronavirus, we do get more market-moving data out of the US tomorrow with Non-Farm Payrolls, expected to show a 175K increase following last month’s better than expected 225K reading.

IG client^* and CoT sentiment for Nasdaq

Retail bias has also shifted here from a previous majority long 53% to a majority short 55%.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

Less so than the Dow or Nasdaq, the German DAX also finished in the green in what was a risk-on move yesterday for equities as expectations of monetary easing continue to rise, with money markets pricing in a rate cut out of the ECB (European Central Bank) in next week’s meeting. German services PMI was worse than expected but continued to show expansion, and we will get factory orders data tomorrow out of the Eurozone’s manufacturing powerhouse. In terms of its components, most were in the green including automaker shares, but there were a few underperformers that included financials’ Wirecard and Deutsche Bank.

IG client^* and CoT sentiment for DAX

Retail bias here hasn’t just moved but shifted, from a previous heavy long 66% to a now slight majority short 51%.

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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