Dow, Nasdaq, and DAX retrace slightly, fresh shorts take profit
Relatively range-bound movement as investors await any trade and central bank updates.
Dow Technical analysis, overview, strategies, and levels
As far as sectors go, there were only a few of the Dow’s in the green which included real estate and consumer staples, while the underperformers were health care and tech with Apple at the bottom in terms of its components. And with earnings mostly out of the way and relatively light US data this evening, movement may be more limiting unless fresh news emerges on the US-China trade front, as optimism is already rising on the US-Mexico-Canada Agreement (USMCA) which could be finalized today as officials meet in Mexico City. Otherwise traders will have to wait for tomorrow's FOMC monetary policy announcement for clues regarding the central bank's forward guidance.
IG client and CoT sentiment for Dow
The slight retracement has already enticed fresh and range-trading shorts into taking profit, with retail bias dropping 6% to a heavy long 67%.
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
With indices globally in the red yesterday, the Nasdaq was no exception to that rule suffering a slight retracement but failing to undo its current technical overview of a stalling bull trend which on the daily level is showing more of its main technical indicators shifting back to neutral. With its fate (as well as plenty of other indices) tied to both central bank monetary policy and trade expectations, that’ll make Wednesday’s US Federal Reserve monetary policy announcement and any trade updates between now and December 15th’s additional US tariff application on Chinese imports of crucial importance.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
Few of its components outperformed yesterday, and its been a shift in the DAX’s technical overview on the daily to a more consolidatory outlook but where its ADX (Average Directional Index) continues to show a propensity to trend. Contrarian breakout strategies may be more ideal once any trade updates occur and/or when the ECB (European Central Bank) meets this Thursday. Furthermore, while the daily technical overview is consolidatory, on the weekly it remains a stalling bull trend, suggestive that the time frame matters for those looking for intraday vs. interday trades.
IG client and CoT sentiment for DAX
In sentiment, the biggest move amongst the three indices occurred here with retail bias dropping 10% on yesterday’s limited price drop alone to a heavy short 63%, and suggestive that range-trading remains heavy amongst retail traders for this German index.
DAX chart with retail and institutional sentiment
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