US Senate passes $2tn stimulus package, House to vote tomorrow

Dow Technical analysis, overview, strategies, and levels

A two-day gain is a rare sight as of late, but that's what we got yesterday for the Dow before its futures pointed lower this morning despite a $2tn stimulus package unanimously passing in the Senate, with the House to vote on it tomorrow. The package includes $1,200 in direct payments to adults, $500 added for every child, increase in unemployment insurance, grants for airlines and cargo carriers’ employee wages, and a pool of $500bn of taxpayer money to make loans/investments in businesses, states, and municipalities affected by the virus. It also bans companies that take government loans from buying back stock until a year after loans area paid back. The next crucial item will be economic data out of the US tonight, where unemployment claims are expected to surge.

IG client^* and CoT sentiment for Dow

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

Neither of yesterday’s key pivot points were reached for the Nasdaq, and in turn not offering a play for either conformist breakout or contrarian reversal strategies despite previous sessions offering plenty in favor of both. While a positive DMI (Directional Movement Index) cross did occur, technicals are far less relevant in the current uncertain coronavirus storm.

IG client^* and CoT sentiment for Nasdaq

Retail bias shifted to the middle yesterday, but a brief dip has taken that bias back into slight majority long territory standing at 52%, less than that of larger speculative traders according to last Friday’s CoT (Commitment of Traders) report.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

The DAX managed to finish in the green yesterday, even if futures are down slightly this morning. In terms of stimulus news, while the US Senate passed its package, the German government also agreed to stimulus for the Eurozone’s manufacturing powerhouse, a €750bn package. In terms of its components, adidas and VW were relative outperformers, but a handful were in the red including airliner Lufthansa. Unlike the Nasdaq which didn’t offer a trading play yesterday, here its price broke through yesterday’s 1^st Resistance level offering plenty before eventually retracing back down. In German data, IFO's business sentiment figures disappointed, and GfK's consumer sentiment figure is up next expected to drop as well.

IG client^* and CoT sentiment for DAX

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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