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Nasdaq 100: futures little changed after another record close

Successive increases keep the technical overview bullish, while heavy sell client bias has resumed shorting into price gains.

Source: Bloomberg

Another record high, tech shines

Another day, another record high for both the S&P 500 and Nasdaq 100, while the Dow 30 and Russell 2000 struggled a bit. Most sectors actually finished yesterday's session in the red, but communication and tech were outperformers, with the losses limited for consumer discretionary, and meant this tech-heavy index managed to best the rest with gains of about 1%.

Mixed earnings, decent data, and a bad auction

Component performance by the close put Netflix and ASML on top, following their respective earnings, AMD in third, enjoying an upgrade from New Street Research to buy. The attention in after-hours was on heavyweight Tesla, whose share price took a hit after its earnings and revenue miss; that came with a warning on growth for this year.

Economic data out of the US showed preliminary Purchasing Managers’ Index (PMIs) improved and easily beat forecasts, both manufacturing and services above 50 - signifying expansion. The weekly mortgage applications showed another increase, even if by a smaller 3.7% after the week before’s 10.4%.

As for treasury yields, they finished the session higher again, and the very disappointing five-year auction took some attention. Yields also closed up in real terms as breakeven inflation rates were little changed, and market pricing (CME's FedWatch) now via majority, anticipating a hold in March instead of a cut, and failing to get beneath 4% by the end of this year.

More earnings and data to digest

We’ve got plenty more to digest over the next two days with more of the Nasdaq 100’s components expected to release their figures including Intel. As for economic data, durables and advance Gross Domestic Product (GDP) releasing today, and closely watched pricing data tomorrow with Personal Consumption Expenditures (PCE).

Nasdaq technical analysis, overview, strategies, and levels

A spike in price that briefly went past its previous second resistance favoring conformist buy-breakout strategies before the pullback as of writing this morning, to its previous first resistance; in all keeping, the key technical indicators green and an overview that’s still bullish. But with any uptick in volatility comes added caution, and more so for conformist buys off its first support that ideally should only be done via significant reversal for those anticipating the overview to remain bullish.

Source: IG

IG client and CoT sentiment for the Nasdaq

When it comes to IG client sentiment, we were in a period where price gains didn’t result in traders shorting, with the sell bias amongst them dropping. But they’ve starting to take that short bias higher once more, from a heavy 69% yesterday to a heavier 72% as of this morning. CoT speculators have been on the buy side throughout this period, opting to hold at 65% according to last Friday’s report.

Source: IG

Nasdaq chart with retail and institutional sentiment

Source: IG
  • *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 7am for the outer circle. Inner circle is from the previous trading day.
  • **CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior.

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