Dow surges, Nasdaq at record highs following geopolitical updates
Traders remain tested as the highs squeeze short positions
Dow Technical analysis, overview, strategies, and levels
Geopolitical risks that abated somewhat yesterday sent investors into a ‘risk-on’ atmosphere snapping up riskier assets and dropping safe haven, and as a result, US indices were in for a surge with the Dow not that far off its record highs. Nearly all its sectors were in the green with tech and communications outperforming, and energy that was massively in the red as oil prices plummeted. As for its components, Boeing was second from the bottom following a crash involving one of its airplanes. US data was better than expected with ADP’s employment figure beating estimates, and ahead of NFP (Non-Farm Payrolls) tomorrow.
IG client and CoT sentiment for Dow
In sentiment, retail bias has pushed further into extreme short territory standing now at 78%.
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
With a broken bull trend line on the daily, the drop in the Nasdaq early on in yesterday’s session was met with retracement and a surge higher to fresh record highs, keeping its technical overview of a stalling bull trend intact, even if it was buoyed by fundamental geopolitical news. Walgreens was at the bottom following its earnings miss, while Tesla outperformed with its price reaching a fresh record high worth more than the combined values of General Motors (GM) and Ford.
IG client and CoT sentiment for Nasdaq
Retail bias was at an extreme short 78% prior to the move as traders anticipated a price drop given the geopolitical worry, and hasn’t moved far from that standing at 77%.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
While there was some data yesterday, the moves for the DAX have largely been in line with global indices that are reliant on any geopolitical updates. And hence, despite German data yesterday that disappointed with factory orders contracting by 1.3%, its price surged higher towards its mid-term resistance level. Deutsche Bank outperformed amongst its components, though few were in the red in what was a bullish finish to its session. While there will be more German data today, they are expected to be low-impacting with its trade and industrial production figures.
IG client and CoT sentiment for DAX
In sentiment, retail bias has been heavy on range-trading the index, and sentiment has surged from yesterday’s heavy short 69% to an extreme short 81% as of today morning.
DAX chart with retail and institutional sentiment
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Be ready to act on the next non-farm payrolls report
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