Rough start to the quarter for Dow, Nasdaq and DAX
Futures recover slightly, retail bias shifts in the Nasdaq and DAX.
Dow Technical analysis, overview, strategies, and levels
It was a rough start to the month and quarter for the Dow, with a harsh fall and where only Walmart managed to finish in the green. Losses were heaviest for Boeing with its share price down over 12%, and where as sector, defensive utilities, real estate, and financials bore the brunt of the losses. In terms of US data, ISM (and Markit's) estimate were better than expected but still showing contraction, ISM prices showed far heavier contraction, and auto sales from Wards showed a big dip on the previous months, a trend expected to continue especially with unemployment claims set to show another consecutive 3m+ increase later today, and ahead of tomorrow's Non-Farm Payrolls.
IG client* and CoT sentiment for Dow
The price drop is a boon for retail traders, whose majority short bias has dropped to 56% as of this morning.
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
As with the Dow, it was a red day for the Nasdaq, finishing lower and doing little to aid conformist breakout strategies on a lack of follow through beyond yesterday’s 1st Support level. Amongst its components, while there were a few more in the green (compared to the Dow) including Regeneron Pharmaceuticals and T-Mobile, the bulk were in the red and led by American Airlines plummeting over 12% (similar to Boeing's share price drop as the travel industry suffers and the US President considers a lockdown on domestic air travel to coronavirus hotspots). Over 80% of Americans are now under some form of a lockdown as the number of deaths soar.
IG client* and CoT sentiment for Nasdaq
In sentiment, retail bias has shifted to the middle from yesterday's 59% majority short bias.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
Although it finished with a smaller percentage decline than both Dow and Nasdaq (and failed to reach either of yesterday’s key pivot points), all its components were in the red with the loses led by airplane engine maker MTU Aero Engines, and where auto shares like that of Daimler, VW, and BMW weren't that far behind. Airliner Lufthansa also took heavy losses, down over 6% and a common theme amongst all the indices where investors prefer not to be associated with airplane makers and airliners as more regions go into lockdown.
IG client* and CoT sentiment for DAX
In sentiment, retail bias has shifted from a majority short 56% yesterday morning to a majority long 58%, a common theme for this index as range-traders attempt to find support and resistance levels to trade off of.
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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