Nasdaq tops 10,000, Dow and DAX finish lower

Dow Technical analysis, overview, strategies, and levels

The Dow underperformed for a change yesterday against the Nasdaq, but did offer a buy-on-reversal opportunity with a move off of yesterday's 1^st Resistance level to aid conformist strategies. Only Apple, Microsoft and Walmart closed higher with fresh record highs for the two tech giants, while the rest of its components finished in the red with the losses heaviest for Boeing (which had been outperforming with double digits gains previously for a partial retracement). Only the tech and communication sector finished slightly in the green, the rest of the sectors contracting with energy and industrials suffering the most. We've got CPI (Consumer Price Index) figures out of the US and – more importantly – the US Federal Reserve's (Fed) decision and outlook, which is set to influence risk appetite and the greenback.

IG client^* and CoT sentiment for Dow

In sentiment, the retracement has given a chance for fresh averaged-in retail shorts at the highs to get out, taking short bias down to 62%.

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

The Nasdaq didn't just outperform yesterday as both Dow and DAX contracted, but also briefly topped the 10,000 mark to post another fresh record high and breach the 10000 level (coinciding roughly with yesterday's 1^st Resistance level). Outperformers included AMD, Netflix, and Microsoft, but there were plenty in the red including travel site Expedia, hotel chain Marriott, and Liberty Global. It was also noteworthy that Amazon, Apple, Facebook and Microsoft closed at new all-time highs with the combined market value closing in on $5 tn. As with other US indices (and global indices reliant on global improved risk appetite), the Fed's decision and outlook later today will be a closely watched event.

IG client^* and CoT sentiment for Nasdaq

Due to the price increase, majority retail short bias has risen here instead of dropped as is the case with both Dow and DAX, and is in heavy short territory as of this morning at 71%.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

The DAX was in for a volatile session yesterday, and one where conformist technical overview strategies failed with a break below both of yesterday's key support levels before only partially retracing back up. Only a few of its components finished higher including Beiersdorf and SAP, while airplane engine maker MTU Aero Engines contracted the most. German trade data showed a record decline in April with exports plunging due to the coronavirus pandemic, taking its surplus from 21.6bn two months prior to just 3.2bn and follows the double digit contraction in Monday's industrial production figure.

IG client^* and CoT sentiment for DAX

The price drop in the DAX however has been a much-needed boon for retail traders, and fresher averaged-in shorts were swift to close out as well as longs initiating to take yesterday's heavy short bias of 68% down to more moderate levels of 57% as of this morning.

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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