Dow, Nasdaq, and DAX finish the session higher

Dow Technical analysis, overview, strategies, and levels

It was a green finish for the Dow yesterday, with its price breaching its weekly 1^st Resistance level by more than 250 points earlier this morning before retracing. All its components finished higher with the exception of Boeing, registering a 6% loss instead. The outperformer was Johnson & Johnson, its stock surging 8% after the company said human testing of its vaccine would begin in September, and cut a deal with the government to prepare for a mass production of any future vaccine. US sector performance showed all its sectors finishing higher, with health care enjoying the most gains and energy the least. The dismal news however has been on the debt front, with Moody's cut its outlook for US corporate debt from stable to negative.

IG client^* and CoT sentiment for Dow

Any further price increases will likely tempt more longs squeezed on the move to 18000 into closing out, and push majority short bias even higher.

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

As with the Dow, the Nasdaq enjoyed a finish higher in yesterday’s session. And while its weekly 1^st Resistance level was breached this morning on the pop higher following better than expected data out of China in the form of expanding PMIs (Purchasing Managers Index) for its manufacturing and services sector, the breakouts beyond its key pivot point was less than 100 points before partially retracing back down. While most of its components finished the session higher with Autodesk outperforming, there were a handful in the red with American Airlines down nearly 13%, as well as travel site Expedia and Marriott suffering, proving that the hospitality sector won’t be able to outperform in the current coronavirus storm.

IG client^* and CoT sentiment for Nasdaq

The price gains have enticed longs into closing out and shorts into entering, and pushing majority short retail bias higher to a heavy short 65%.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

The gains in the DAX weren’t as big as those in US indices, and as such its price only barely breached its weekly 1^st Resistance level before retracing back down, aiding a contrarian reversal instead. Here too, airlines weren't able to enjoy yesterday's gains, with Lufthansa a clear underperformer and aircraft engine manufacturer MTU Aero Engines leading the declines. In German data, preliminary CPI (Consumer Price Index) figures showed a slight 0.1% increase, and ahead of employment data expected to show a rise in its unemployment rate.

IG client^* and CoT sentiment for DAX

The relative lack of gains here has translated into a relative lack of an increase in retail sell bias, rising to a majority short 58% and well below the heavy short bias held by retail traders in both Dow and Nasdaq.

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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