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 & S&P 500 CoT bias shifts to majority short

Retail bias remains majority short in Dow, Nasdaq, and DAX.

Dow Technical analysis, overview, strategies, and levels

Contrary to the weeks before, last week's Weekly pivot points held for the Dow in what was a relative calm week, and in turn aiding contrarian reversals over conformist breakout strategies. There were only a few outperformers on Friday that included Pfizer and Boeing, but where a clear majority were in the red with losses heaviest by UnitedHealth and American Express. Only consumer staples as a sector finished in the green, the rest contracting with defensive utilities hurt the most.

IG client* and CoT sentiment for Dow

But the more noteworthy item here has been a shift in sentiment for larger speculative traders according to the latest CoT (Commitment of Traders) report, from a previous majority long 59% to a now heavy short 70% on an increase in short positions by 5,481 lots and a simultaneous drop in long positions by 672. It has also shifted for the S&P 500 from a slight majority long 51% to a slight majority short 51%.

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

On the Weekly, the Nasdaq's price managed to breach last week's 1st Resistance level and to offer conformist breakout strategies a bit before retracing back down with contrarian reversals the outperforming strategy. On Friday, it ended only slightly in the red. Losses were once again led by the hospitality industry – American Airlines and Marriott both suffering more than 6% price drops – and where the outperformer was Tesla.

IG client* and CoT sentiment for Nasdaq

Sentiment hasn't shifted amongst institutional traders as it has for both Dow and S&P 500, but majority long bias has dropped to 60% on a reduction in long positions by 620 lots and an increase in shorts by 583 lots. Retail bias while still majority short has dropped from the start of last week's 57% and is close to the middle at the start of this week at 53%, at one point briefly shifting to the middle intraweek.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

It was a very rangebound week for the German DAX, offering little in either direction and briefly crossing above last week's Weekly 1st Resistance level to offer only some points before giving preferability to contrarian reversals. The contrast to its volatile technical overview extended into Friday's session, at the bottom airplane engine maker MTU Aero Engines, and a handful of outperformers with Deutsche Boerse leading the gains. Germany's services PMI (Purchasing Managers Index) showed a worse than expected contraction last week, and in terms of German data we get factory orders this morning expected to show a negative reading.

IG client* and CoT sentiment for DAX

Lastly, in sentiment, retail bias shifted intraweek to a majority long 58%, but range-trading longs have been swifter to close out trading these narrow ranges and pushing the bias back towards a slight majority short 53%.

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.

Seize your opportunity

Deal on the world’s stock indices today.

  • Trade on rising or falling markets
  • Get one-point spreads on the FTSE 100
  • Unrivalled 24-hour pricing

See opportunity on an index?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on an index?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from one point on the FTSE 100
  • Trade more 24-hour indices than any other provider
  • Analyse and deal seamlessly on smart, fast charts

See opportunity on an index?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

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.