Dow, Nasdaq and DAX suffer heavy losses
Retail bias shifts in all three to majority long, technical overview volatile.
Dow Technical analysis, overview, strategies, and levels
It was the Dow’s worst week since the 2008 financial crisis, suffering seven consecutive trading session of losses that undid the gains made in 2020, and a whole lot more. Friday had a few outperformers, with those lagging including financials and Boeing at the very bottom. In terms of US sector performance, while it showed energy and tech slightly in the green on Friday, there were big losses for defensive utilities and real estate. The net result has clearly shifted the technical overview from what was a stalling bull trend to match that of its daily volatile overview, as last week’s moves aided daily volatile conformist breakout strategies against contrarian reversals.
IG client* and CoT sentiment for Dow
In sentiment, retail bias has shifted from a majority short 63% at the start of last week to a majority long 61% at the start of this week. Larger speculative traders according to the latest CoT (Commitment of Traders) report weren’t beneficiaries of the latest moves, holding an extreme long 78% bias prior to the heavy price drops.
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
While it was a punishing week for the Nasdaq, the losses suffered here were slightly less than the Dow, and it did manage to undo losses suffered on Friday with Nvidia outperforming and American Airlines at the bottom. But as with the Dow, the technical overview has clearly shifted to volatile in the current coronavirus storm, with a string of economic data expected to consistently disappoint moving forward as households and businesses hunker down.
IG client* and CoT sentiment for Nasdaq
Retail bias here has also shifted, starting last week at a majority short 60% and ending it with a majority long 56%. Institutional bias was only 57% a couple weeks ago, but prior to the move that bias rose to a heavier 66% as short positions dropped by 3,337 lots and longs rose by 898 lots.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
The DAX also suffered heavily losses last week, with a big red session on Friday that ensured its price ended the week below all its main long-term weekly moving averages (MA), crossing the 50, 100, and 200-week MA’s. All its components were in the red on Friday, with auto shares relative outperformers and airline stocks once again hurt with Lufthansa near the bottom. That has meant that its technical overview has also shifted to volatile, with manufacturing data out of Germany today following China’s weekend contractions in both manufacturing and services at a record pace.
IG client* and CoT sentiment for DAX
Retail bias here has shifted from a heavy short 73% at the start of last week to a heavy long 65% at the start of this week.
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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