Risk-on for Dow, Nasdaq and DAX

Dow Technical analysis, overview, strategies, and levels

It was a busy day yesterday with US preliminary GDP (Gross Domestic Product) showing a worse than expected contraction for Q1, but with Fed Chair Powell keeping monetary easing largely on hold. In earnings, Boeing reported another quarterly loss announcing it would reduce its workforce by 10%, while Microsoft beat expectations for both sales and profit. Up next we get earnings for (Dow components’) Apple, McDonald’s, Dow, and Visa, while tomorrow we get energy giants’ Chevron and ExxonMobil. In terms of component performance yesterday, American Express, Visa and Boeing were on top, with only a handful in the red including Walmart hit hardest. Talk is shifting towards coronavirus cure and reopening, and the next worthy item on the economic calendar out of the US is the infamous unemployment claims, projected to show another multi-million figure.

IG client^* and CoT sentiment for Dow

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

There were plenty of earnings announcements yesterday, Tesla posting its third quarterly profit in a row, Facebook beating analysts' estimates for revenue, and Microsoft's results were better than expected for both sales and profit (all three are up significantly in afterhours). However, it was Nasdaq component Gilead Sciences that stole the show early on with news that its experimental antiviral drug remdesivir showed coronavirus patients recovering more swiftly and is the new 'standard of care' with the FDA in talks to ease availability. Up next we get earnings from tech giants’ Amazon and Apple, as well as that of this tech index’s components’ American Airlines, Comcast, Expedia, and Gilead Sciences. As with the Dow, buy breakout opportunities yielded the most yesterday.

IG client^* and CoT sentiment for Nasdaq

And here too, retail bias has surged to heavy short levels opposite the recent bullish moves.And here too, retail bias has surged to heavy short levels opposite the recent bullish moves.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

The DAX finally managed to surge higher and keep its stalling bull trend technical overview intact, taking its price breaching yesterday's 1st Resistance level. Amongst its components, Deutsche Bank was up by the largest percentage followed by airplane engine maker MTU Aero Engines, and where only a couple were in the red including Bayer and Wirecard suffering another big loss down 8% after what has been a brutal week. Significant data awaits for the Eurozone as well as that of its manufacturing powerhouse. German retail and employment data will be released today, but expect the ECB (European Central Bank) to take the attention when it comes to any risk-on moves for European equities, especially if any further easing policies are be announced.

IG client^* and CoT sentiment for DAX

Given range-trading is usually heaviest here, that means the bullish moves yesterday have taken retail bias to a heavy short 70%.

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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