Dow, Nasdaq and DAX futures up this morning

Dow Technical analysis, overview, strategies, and levels

With the US Federal Reserve (Fed) announcing what is effectively unlimited quantitative easing (QE) with the purchase of US Treasuries, mortgage-backed securities, as well as investment grade corporate bonds, the net result will ideally be less of a liquidity issue for at least larger US companies. And despite finishing in the red yesterday with only a few outperformers that included Boeing, Intel and Home Depot, futures are pointing higher this morning. However, monetary stimulus (as well as fiscal stimulus should the US Senate manage to pass the coronavirus package) can only offer so much for the real economy, as more US governors order citizen of their respective states to stay indoors. In earnings, Nike is expected to announce its earnings today.

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 in the green yesterday and is also up this morning alongside other indices. That being said, while yesterday’s outperformers included Netflix and gaming stocks which are expected to outperform as households hunker down, there were plenty of its components in the red including Liberty Global at the bottom. Should the market manage to finally settle (and that is unlikely given ongoing fundamental announcements) and it might finally give a chance for contrarian technical overview strategies to outperform. A failure to do just that and another spike in volatility will give conformist breakouts yet another reason to celebrate.

IG client^* and CoT sentiment for Nasdaq

In sentiment, retail bias is unchanged at a majority long 62%, with far more upside movement needed to unwind those longs in profit.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

The German DAX managed to not just undo the weekend gap lower, but move for a finish in the green, with futures pointing higher as of this morning ahead of a string of preliminary manufacturing and services PMIs (Purchasing Managers Index) that will be of importance in gauging how both sectors are being affected by the coronavirus. That will include those of Germany, which are expected to show significant contraction, and where those figures are set to worsen as stricter measures are imposed.

IG client^* and CoT sentiment for DAX

From a trader standpoint, retail traders aren’t complaining given they’ve been range-trading at the lows, with majority long bias dropping 3% from yesterday and on the verge of shifting to majority short.

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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