Dow, Nasdaq and DAX retreat again

Dow Technical analysis, overview, strategies, and levels

A third consecutive day of decline for the Dow continuing to test its bull trend technical overview that has stalled heavily at these levels, even if its price failed to reach either of yesterday's key pivot points. US Federal Reserve (Fed) Chair Powell's comments regarding the economy pointed to further downside risks and an "extended period" of weak economic growth, but that more assistance was still a possibility. Amongst the Dow's components, only Merck finished in the green, the rest contracting with the losses most severe for American Express, Walgreens, and ExxonMobil. In earnings, Cisco's share price rose in after hours following its release. All US sectors were flashing red yesterday, heaviest drops for energy and financials, and defensive utilities contracting the least.

IG client* and CoT sentiment for the Dow

In sentiment, retail bias is on the verge of shifting to majority long as more shorts unwind.

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

Given the Nasdaq managed to hold its ground compared to losses in the Dow (and other indices), there were enough components in the green with Regeneron and Netease outperforming, and in the bottom Ulta Beauty, Walgreens and Marriott. The intraday upside move yesterday failed to give conformist buy breakouts follow through, retracing back down to aid contrarian reversals instead. Its bull trend channel is still holding however, and as it stands it’s at the lower end of that channel testing its positive technical bias. We get more US data today with unemployment claims, and tomorrow's string of items that will include retail that will be closely watched.

IG client* and CoT sentiment for Nasdaq

In sentiment, retail bias is still in healthier majority short territory compared to the Dow on a lack of retracement, standing a couple notches lower at 59% as of this morning.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

A third consecutive red day for the DAX, and where all its components failed to finish higher, the losses highest for Continental, Daimler and Deutsche Bank, and less so for Fresenius Medical Care and Merck. The movement was relatively rangebound, failing to reach either of yesterday's key pivot points as its bull trend technical overview continues to stall heavily at these levels with its bull trend channel broken on the daily. In terms of German economic data, we get final CPI (Consumer Price Index) figures and wholesale data today before tomorrow's preliminary GDP (Gross Domestic Product) reading.

IG client* sentiment for the DAX

After shifting to majority long bias the day before, retail short bias has since risen as the price drop in a consolidatory fashion has enticed more range-trading shorts to close out, and fresh longs to initiate.

DAX chart with retail 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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