Markets brace for US unemployment claims

Dow Technical analysis, overview, strategies, and levels

A risk-off environment yesterday as earnings showed a drop in profit combined with increased expectations of default and downgrades out of key US banks, and where the data was a clear disappointment with heavy contractions in manufacturing and retail and capacity at 2010 lows. Nearly all its components were in the red led by Dow and Walgreens, UnitedHealth was on top (following its earnings) and with Boeing were two of a handful of those finishing in the green. All US sectors were in the red, losses greatest in energy and financials, least affected was health. Yet, despite the drop the Dow’s price didn't reach yesterday’s 1^st Support level, and its short-term bull trend line is still holding ahead of the closely watched US unemployment claims today, set to show another big figure.

IG client^* and CoT sentiment for Dow

Retail shorts were swift to unwind, but still hold a heavy short bias at 66%.

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

Yesterday’s risk-off mood did little to dent the Nasdaq's price, taking it below its 100-day moving average but didn't reach yesterday's 1^st Support level keeping its short-term bull trend line intact, as well as plenty of its main technical indicators still flashing green. It also meant plenty of its components managed to finish higher for the session despite the slight retracement, with Netflix, American Airlines (following airlines' acceptance of the government package), and Tesla relative outperformers.

IG client^* and CoT sentiment for Nasdaq

Retail bias here has also dropped as fresh shorts get out, taking it down to a heavy short 66% as identical that of retail Dow sentiment.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

Where the Dow and Nasdaq suffered relatively small losses, it wasn't the case for the German DAX whose price broke below yesterday’s 1^st Support level but failing (thus far) to reach yesterday’s stop loss for the level. That has meant US indices have been the relative outperformers even if US data has continued to depress and coronavirus figures continue to rise. That could be down to far bigger central bank easing out of the US Federal Reserve compared to that of the European Central Bank. In coronavirus news, Germany is set to slowly ease restrictions, and the next few items of interest on the economic calendar won't just be tonight's US unemployment claims, but also tomorrow's Chinese data to see how the manufacturing powerhouse has fared and a likely future indication for Germany, its manufacturing powerhouse, and its export-oriented sectors.

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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