Dow, Nasdaq and DAX recover off the lows

Dow Technical analysis, overview, strategies, and levels

The Dow managed to undo the weekend gap and is moving higher this morning as focus shifts to lockdown restrictions easing globally. Amongst its components, outperformers included energy giants' ExxonMobil and Chevron following the increase in oil prices, and for US sectors energy gained the most. But there were plenty in the bottom including Caterpillar and Disney (set to release its earnings today), with industrial and financial sectors contracting the most. As for US data, factory orders showed a 10.3% contraction, and up next we'll get services PMI (Purchasing Managers Index) data from Markit as well as ISM. The attention thereafter for the remainder of the week will primarily be on employment data, given we've got ADP's non-farm estimate tomorrow, unemployment claims the day after, and Non-Farm Payrolls on Friday.

IG client^* and CoT sentiment for Dow

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

Compared to the Dow, the Nasdaq enjoyed a better finish, which kept its price above its 100-day moving average after briefly crossing below it. It was no surprise that airline stocks gapped lower following Berkshire Hathaway's exit, and although Tesla outperformed amongst Nasdaq's components followed by AMD, there were quite a few in the red including Starbucks (which surged in after hours on plans to reopen 85% of its US stores by the end of this week), Marriott, and Comcast. In earnings, Activision and Regeneron Pharmaceuticals will be amongst those releasing their figures today.

IG client^* and CoT sentiment for Nasdaq

For traders, the brief dip may have been a relief for majority short retail traders, but the recovery has led to a rise in that bias to 59%.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

In German data, final manufacturing PMI contracted at a pace similar to expectations with a significant sub-50 reading of 34.5, no doubt a challenge for the Eurozone's manufacturing powerhouse. Up next it’s the German constitutional court ruling, of greater significance to government debt that isn't investment grade as opposed to the sought after German government bonds. When accounting for the gap lower, all its components finished in the red by the close, at the bottom airplane engine maker MTU Aero Engines (airline stocks getting dumped means Boeing and anything airplane related also suffer). However, they've gained in after hours and recovered to close the gap with news of restrictions set to ease more in Germany, and keep its (Daily) technical overview of a stalling bull trend and its bull trend channel barely holding.

IG client^* and CoT sentiment for DAX

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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