Dow, Nasdaq, and DAX in the red as geopolitical tensions rise

Dow Technical analysis, overview, strategies, and levels

With investor appetite on hold anticipating further clarification on the current geopolitical climate, the movement in the Dow was strongly to the downside following an increase in geopolitical tensions. In terms of sector performance, all were in the red led by real estate and consumer staples, while amongst its components, ​Boeing was at the top amongst the few gainers that were present. ISM's (Institute for Supply Management) non-manufacturing PMI (Purchasing Managers Index) showed ongoing expansion at 55. ADP (Automatic Data Processing) will be releasing its figure later today, though bigger market-movement is reserved for Friday's NFP (Non-Farm Payrolls) figure. That’s on the economic data front, as expect larger movement and a breach of pivot points should any fresh geopolitical news emerge, shelving its current bull trend technical overview that in the short-term needs little to shift.

IG client and CoT sentiment for Dow

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

From a technical overview standpoint, its price is above all its main long-term moving averages, with a positive DMI (Directional Movement Index), and showing an ongoing propensity to trend according to its ADX (Average Directional Index). The same holds true on the weekly which has showed more bullish long-term bias. However, technicals mean less in the grand scheme of things with geopolitical tensions on the rise, and hence contrarian strategies can’t be ruled out should a fundamental move render technicals less useful. In terms of its components, it was a record high for Tesla again, amongst the top performers and with its market cap almost as much as car giants' GM and Ford combined (although when accounting for debt and cash it's ranking drops below the both of them).

IG client and CoT sentiment for Nasdaq

As for sentiment, retail bias didn’t drop on the plummet rather increased to an extreme short 78%, as shorts get comfortable initiating at these levels anticipating further downside moves.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

A lack of German data yesterday meant focus when it comes to risk-related equities came down to geopolitical tensions, which in turn showed no signs of abating and taking the DAX lower for the session after a brief move higher intraday. There will be factory orders out of the bloc's manufacturing powerhouse this morning and following last month's slight 0.4% contraction. From a technical standpoint – and it certainly means less in the face of the current fundamental geopolitical moves – most of its main technical indicators remain neutral, and with its price beneath all its main short-term moving averages.

IG client and CoT sentiment for DAX

As for sentiment, retail bias – as with the Nasdaq – has risen into further majority short territory as fresh shorts initiate anticipating a price drop, with the percent bias rising 5% to a heavy short 69%.

DAX chart with retail and institutional sentiment