Nasdaq 100: Futures take a dip following session of limited gains

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Tech takes a dip: a look at yesterday's market movers

Most sectors finished yesterday's session in the green, with communication ranking second. However, there was a slight red finish for consumer discretionary and tech sectors. In general, it was a close for the tech-heavy index, not far from the opening, and it slightly underperformed both the Dow 30 and S&P 500. This is unlike what was observed on Tuesday following US CPI (Consumer Price Index) readings, which were lighter than anticipated.

Surprise inflation twist: PPI drops, yields rise

Regarding Treasury yields, they finished the session higher, although they did not fully recover from the losses incurred the day before when CPI was below forecasts. They were higher in real terms, with a slight increase from recent lows in breakeven inflation rates.

Market pricing, according to CME's FedWatch, indicates a majority in favor of the first rate cut from current levels, still expected in May of next year. Federal Reserve (Fed) members discussed housing, with Barkin mentioning an increase in supply in that sector. On the geopolitical front, there was a meeting between Biden and Xi, discussing "real progress.

FedSpeak and more: what's on the agenda today?

Today, we have more speeches from Fed members, along with the weekly claims, Philly Fed manufacturing data, and trade pricing data. Additionally, there are a couple of items related to the housing sector scheduled for tomorrow. Concerning earnings among the Nasdaq 100's components, Applied Materials and Ross Stores are expected to release their figures next.

Nasdaq technical analysis, overview, strategies and levels

The intraday highs were just below its previous 1st Resistance level, resulting in a lack of opportunities for both conformist and contrarian strategies. Most of the key technical indicators on the daily chart are showing green, along with a trending ADX (Average Directional Movement Index), typically associated with a more bullish than cautious technical outlook. This would be even more pronounced if not for the issue of price-indicator proximity, which is becoming less of a concern as we experience further price gains.

IG client* and CoT** sentiment for the Nasdaq

As for sentiment, heavy sell amongst retail traders who have been shorting into the gains, and a notch higher at 70% compared to yesterday morning. CoT speculators are in the opposite camp and holding majority buy bias, opting to move away from the middle according to last Monday’s report.

Nasdaq 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.}