Tech-heavy Nasdaq outperforms, Dow & DAX slightly higher

Dow Technical analysis, overview, strategies, and levels

The Dow didn't outperform this time around, but managed to finish higher that kept its price within yesterday's main levels. Amongst its components, most finished higher with the outperformers tech stocks' Intel and Microsoft leading the gains, with a few finishing in the red where the biggest percentage loss was Boeing as its share price retraced off of Monday's highs. As a sector, energy and consumer discretionary gained the most, with defensive utilities registering the smallest percentage increase. Economic data was mixed with CB's consumer confidence beating expectations by a healthy margin but ISM-Chicago's PMI (Purchasing Managers Index) a miss. We'll get more PMIs today out of Markit and ISM for the US, as well as the Federal Reserve's minutes, and ADP’s non-farm estimate. On the coronavirus front, cases and concerns have failed to subside, and as a result travel and hospitality stocks and sectors could be in for eventual further trouble.

IG client^* and CoT sentiment for Dow

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

It was the tech-heavy Nasdaq's turn to outperform this time around, with a finish that took its price above its bull trend line to keep it within its bull trend channel, and crossing above the last of its main short-term moving averages. Buy breakout on yesterday's 1st Resistance level was the outperforming strategy, though once again intraday momentum has been limiting here as sectors more exposed to coronavirus uncertainties usually experience more volatility. The outperformers here were semiconductor manufacturing company Xilinx after it raised its forecasts on the loosening of some restrictions on Chinese companies, and Tesla in second as its share price made a fresh record high with hopes of its inclusion in the S&P500 in the near future. T-Mobile underperformed by the close only for its share price to partially recover in volatile after hours movement.

IG client^* and CoT sentiment for Nasdaq

In sentiment, retail short bias is back in heavy territory, rising to 66%.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

There was little action on this front yesterday as its price finished slightly higher in what was a mostly oscillatory session that failed to see its price reach either of its previous key pivot points. Once again, Wirecard was the most volatile amongst its components with big double-digit percentage gains and the clear outperformer. Looking at the rest however, Deutsche Post and Deutsche Wohnen outperformed with the latter recovering, and amongst the handful finishing in the bottom Bayer and Covestro suffered the largest percentage drops. We've got German economic data today including Markit's final manufacturing PMI expected to show a better but still contracting sub-50 reading, and unemployment figures.

IG client^* and CoT sentiment for DAX

Lastly, in sentiment, the relative lack of a change in price has resulted in a lack of a change in sentiment, the bias holding at a majority short 59% amongst retail traders.

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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