CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Dow and Nasdaq hit limit down as Senate vote fails

Trader bias remain majority long in all three, Dow long positions unwind.

Dow Technical analysis, overview, strategies, and levels

The plummet last Monday was a boon for conformist technical overview traders whose sell on breakout offered plenty, but thereafter the market was relatively more rangebound hugging the lows (even if intraday moves were still volatile and aiding daily conformist breakout strategies). Most of its components were in the red led by Disney and 3M, while the few that were in the green included Travelers, Chevron and Merck. US sector performance showed nearly all in the red led by defensive utilities, while energy was in the green albeit slightly. In US data, it was mixed to the downside with manufacturing contracting, unemployment claims rising, but existing home sales posting a strong figure.

Expect the focus to shift towards fiscal policy, as the Dow hit limit down this morning following the US Senate’s failure to pass a stimulus package to deal with the effects of the coronavirus, a re-vote scheduled for later today.

IG client* and CoT sentiment for Dow

In sentiment, retail bias has shifted to majority long as shorts got out on Monday, while institutional long bias has dropped to 72% on a larger reduction in longs (4,109 lots) than shorts (697 lots).

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

On both the daily and weekly, conformist breakout strategies offered plenty. But given last week's moves started to oscillate widely within a more rangebound territory, positioning opposite market movement after significant reversals did yield as well. The Nasdaq also ended the week in the red, but the extent of the damage was less severe than that of the Dow. In terms of its components, Marriott's share prices were the outperformers in the green, while at the bottom Fastenal and Regeneron Pharmaceuticals led the decline.

IG client* and CoT sentiment for Nasdaq

In sentiment, retail bias here has also shifted from a majority short 54% at the start of the week to a majority long 62%. Larger speculative traders according to the latest CoT (Commitment of Traders) report are also majority long, the bias rising 3% to 60% as the reduction in consolidated shorts by 2,580 lots outdid the reduction in longs by 1,631 lots.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

With big ECB (European Central Bank) easing on the table after its Wednesday announcement, the hope was for the increase in asset purchases to offer more liquidity to the financial markets, and indirectly (or even directly) put some sort of a floor on European equities. Put a floor it did albeit temporarily, as although the DAX's price broke through last week’s Weekly 1st Support levels on more than one occasion, it didn’t offer as much follow through and here was the rare case where contrarian reversals (after significant reversal) managed to outperform on some occasions. IFO’s preliminary data didn’t help, and we’ll get more business and consumer sentiment figures this week as the country bans gatherings of more than two.

IG client* and CoT sentiment for DAX

In sentiment, retail long bias is little changed for the week, but reached a heavy long 71% on Thursday before range-trading longs got out on Friday on the partial retracement.

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.

Be sure to request IG’s Weekly & Daily Market Report when you open an account with IG Dubai and get access to the full information on the FX majors, commodities, indices, and Bitcoin.

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

React to global volatility

Market volatility continues as coronavirus dominates the global agenda. Trade with us to take advantage of:

  • Tight spreads – from just 1 point on major indices, and 2.8 on US crude
  • Guaranteed stops – they’re free to use, and you’ll only pay a small fee if they’re triggered
  • Round-the-clock assistance – our highly-skilled team are on hand to support you

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.