Retail short bias drops in Dow, Nasdaq and DAX

Dow Technical analysis, overview, strategies, and levels

It was a brief buy everything moment for the Dow yesterday, with its price once again making a move higher and piercing yesterday's 1^st Resistance level offering conformist breakouts some before retracing back down in favor of contrarian reversals. Amongst its components, Boeing was back at the bottom after outperforming the session before, while financials' Goldman Sachs and American Express were relative outperformers. US sector performance showed materials gaining the most, and defensive utilities contracting. Amidst the coronavirus storm, the US administration asked Congress for another $250b in aid for small US businesses.

IG client^* and CoT sentiment for Dow

In sentiment, the latest moves were in favor of fresh retail shorts whose heavy short 71% bias yesterday has dropped to 63% as of this morning.

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

As with the Dow, the Nasdaq's price made a move towards yesterday's 1^st Resistance level. But unlike the Dow, it didn't reach and hence neither conformist nor contrarian strategies were in play, its price briefly crossing the 200-day moving average before retracing back down. In terms of its components, American Airlines and travel site Expedia outperformed for a change, with Tesla taking third place as the news this morning showed it has cut employee pay and furloughed workers, while plenty were in the bottom including Gilead Sciences and BioMarin Pharmaceuticals for the second consecutive session.

IG client^* and CoT sentiment for Nasdaq

In sentiment, retail short bias has dropped back down slight from yesterday's majority short 61%, standing at 56% as of this morning.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

The German DAX was also in for a brief intraday move higher, but as with the Nasdaq it failed to reach yesterday's 1^st Resistance level and in turn didn't give any pivot point play. Amongst its components, the outperformers included MTU Aero Engines (one of the more volatile stocks as of late given its exposure to the travel industry as an airplane engine manufacturer) and Deutsche Bank. In German data, industrial production showed a surplus, and the next item in terms of data will be tomorrow's trade data prior to the ECB's (European Central Bank) minutes.

IG client^* and CoT sentiment for DAX

In sentiment, fresh and averaged-in retail traders have also reduced their short bias following the move back down, now at a more moderate majority short 60% as opposed to yesterday's heavy short 67%.

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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