Dow CoT short bias rises, Nasdaq shifts to the middle

Dow Technical analysis, overview, strategies, and levels

The technicals continue to impress in the short-term for the Dow, and in the mid-term its price has moved back above its 100-week moving average with a positive DMI (Directional Movement Index) cross occurring last week. When it comes to fundamentals, US data continued to disappoint, especially on the employment front with another big reading in unemployment claims. That aside, 'reopening' and its respective guidelines may be the theme moving forward. And when it comes to earnings, we've got a string of them this week that will include IBM today, and Coca-Cola tomorrow.

IG client^* and CoT sentiment for Dow

In sentiment, larger speculative traders according to the latest CoT (Commitment of Traders) report upped short positions by 1,456 lots to take majority short bias to 62%, with retail traders in heavier short territory at 72%.

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

It was a week of outperformance for the Nasdaq, its price breaching both of last week's Weekly resistance levels aiding conformist breakout strategies. In terms of performance, Gilead Sciences was on top late last week after unconfirmed reports emerged that its drug showed success, only for the company to state that more needs to be analyzed before drawing any conclusions from the trial. It'll be a big week in earnings, and Netflix whose share price rose to fresh record highs last week will be releasing its figures tomorrow, alongside plenty of other companies.

IG client^* and CoT sentiment for Nasdaq

In sentiment, retail short bias has risen since the start of last week with the bulk of those shorts getting squeezed on the upside movement, while the bias has shifted for institutional traders to the middle on a reduction in longs by 1,057 lots and shorts rising by 1,697 lots.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

The price movement in the DAX wasn't as impressive as that of the Dow or Nasdaq, failing to aid conformist breakout strategies on the Weekly but more than paying off on the daily overview which is a stalling bull trend, as its price lifted itself off the intraweek lows for a finish not far off from its start. In terms of its components, Infineon outperformed late last week with carmaker Volkswagen a close second, withdrawing its outlook for 2020 due to uncertainty over the coronavirus which lead to a 81% drop in Q1 profits. European stocks in general will be in focus this week as plenty will be reporting their earnings.

IG client^* and CoT sentiment for DAX

In sentiment, retail bias is back in heavy short territory following the price increase last Thursday and Friday, with range-trading shorts reinitiating in hopes that market movement will remain rangebound.

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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