Fresh record highs for Dow and Nasdaq
Trade deal that’s expected to be signed “very shortly” improves risk appetite, technical overviews remain unchanged.
Dow Technical analysis, overview, strategies, and levels
While it’s going to be a quiet week in terms of earnings and US data, last week was a fruitful one for US indices that closed at fresh record highs, and the Dow was no exception to that rule. All its sectors were in the green, led by energy, health care, and utilities, and where in terms of its components Boeing was at the bottom. While its price finished the week higher, it failed to offer a move at or beyond last week's weekly 1st Resistance level, though offering plenty on the daily level.
IG client and CoT sentiment for Dow
This has meant that retail traders have been tested heavily, with heavy short bias rising 10% since the start of last week to 76% and not that far off extreme short levels. As for larger speculative traders, the latest CoT (Commitment of Traders) report shows an unchanged bias at a heavy long 67%.
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
Last week's 1st Resistance level got breached, but not by much, as the gains have been bit by bit and hence failing to offer significant breakout opportunities for those looking for momentum in the Nasdaq (as well as other US and global indices). What it hasn’t done is undo its current bull trend technical overview where nearly all its main technical indicators continue to flash green, but has a stalling feature only due to a lack of intraday/intraweek momentum offering breakout (as well as contrarian strategies) significant follow through.
IG client and CoT sentiment for Nasdaq
In terms of bias, retail traders are getting squeezed with the bias rising a notch to an extreme short 78%, while CoT bias is on the verge of shifting as majority long bias drops 2% on an increase in short positioning by 865 lots and a lack of change in long positions.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
While the DAX isn’t enjoying record highs like US indices, it has managed to stay near recent highs and a short-term resistance level that it has had difficulty breaching. This high up and the technicals certainly aren’t bearish, but where its bull trend technical overview continues to stall (as is the case with both Dow and Nasdaq). On the weekly chart, its 50-week moving average (MA) has crossed above the 100-week MA.
IG client and CoT sentiment for DAX
The intraweek plummet towards 13100 aided heavy shorts in taking profit, and majority short bias briefly dropped to 59% on Thursday morning. Overall, it started last week with retail traders at 73%, and starts this week slightly lower at a heavy short 67%.
DAX chart with retail and institutional sentiment
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