Dow oscillates ahead of impacting data and Jackson Hole
Trader bias going into the event is majority sell, and in heavy territory for retail.
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Dow Technical analysis, overview, strategies, and levels
In what's become a common theme for some key indices, oscillations well within key levels failing to offer a play before a potential move that goes beyond levels (though usually of less impact to the upside even if it results in a fresh record high), and such was the case yesterday with a positive finish doing little to shift its technical overview that shows signs of a breakout, but otherwise a heavily stalling bull trend (like the weekly).
Decent day for cyclicals with energy and financials on top, American Express and JPMorgan Chase the components outperforming by the close, Salesforce surging in after-hours with results above estimates and revenue above $6bn for the first time, its 2022 annual revenue and earnings guidance raised. It also meant that the Dow managed to outperform relative to the Nasdaq, even if the latter registered another fresh record high.
As for US data, durables beat estimates though still negative overall at -0.1% (its core which excludes transportation rising 0.7%), and mortgage applications rose for the week ending August 20 by 1.6% after its previous -3.9% reading. Preliminary GDP and unemployment claims today, while crucial pricing data and sentiment out of UoM tomorrow, and the Fed's Powell speaking at the virtual (and closely watched) Jackson Hole event.
IG client* and CoT** sentiment for the Dow
Sentiment for both retail and CoT (Commitment of Traders) speculators are majority short, but it’s in far heavier territory for the former and rising since yesterday morning from 67% to 71% following the slight price gains. For CoT traders, last Friday’s report showed a slight sell 52% bias, shifting from a slight buy 52% the week before in what has largely been a mood that’s in the middle.
Dow 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 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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