Nasdaq 100: resilience with marginal gains, mixed economic data sets tone for market

Sedate sector performance

All sectors save for energy finished yesterday's session in the green, with gains less than 1 per cent. Communication led the way, consumer discretionary was near the middle, and technology posted small gains, which translated into a modestly positive finish for the tech-heavy Nasdaq 100. Its close in percentage terms nearly matched the Dow 30 and slightly surpassed the S&P 500.

Yields little changed, data mixed

Treasury yields ended the session higher, though the longer-term yields (20-year and above) experienced a slight retreat in real terms. Breakeven inflation rates showed little change, and market pricing (according to CME's FedWatch) delayed the forecast for the first rate cut from the US Federal Reserve from current levels to June, although May is not far off a coin toss.

In terms of US economic data, there was:

1. A third consecutive week of gains in weekly mortgage applications, as reported by the MBA
2. Weekly claims outperforming estimates, with initial claims up a lighter 209,000 and continuous claims dropping to 1.84 million
3. Durable goods orders, a clear miss, down 5.4 per cent month-on-month for October, showing no change when excluding transportation
4. The University of Michigan's revised figures indicating consumer sentiment at 61.3, better than the preliminary reading, but the 12-month consumer inflation expectation rose further to 4.5 per cent.

Today's holiday in the US means a quieter economic calendar, while tomorrow will bring preliminary PMIs (Purchasing Managers’ Index) from S&P Global, offering insights into whether the manufacturing sector will fall back into contraction and if services can maintain expansionary territory.

Nasdaq technical analysis, overview, strategies, and levels

In yesterday's session, the Nasdaq's previous 1st Resistance level held, offering only modest follow-through for conformist buy-breakouts before the pullback favoured contrarian sell-after-reversals. Intraday volatility was light ahead of the holidays, providing little incentive for increased risk-taking. The technical overview remains 'bull average' in this daily timeframe, as well as in the weekly analysis, with most of its key technical indicators positive.

IG client and CoT sentiment for the Nasdaq

Sentiment has seen little change in price, with retail traders holding at a heavy sell 65 per cent, remaining cautious about initiating further shorts at these levels. Long positions are being held in anticipation of average or higher trending prices. CoT speculators are close to shifting into a majority short territory, as per last Friday's report, where they reduced their majority long bias from 57 per cent to just 52 per cent.

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.}