Nasdaq technicals little movement ahead of tomorrow’s inflation data

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Tech suffered as a sector but didn't lose out in yesterday's session. With communication changening little and consumer discretionary relatively outperforming even as it too finished in the red. The tech-heavy Nasdaq 100 also finished lower but outperformed against the Dow 30 and S&P 500, both of which were in for a slightly larger percentage drop albeit not noteworthy.

Economic data showed wholesale inventories rose more than expected with a 2.2% reading, and mortgage applications (out of the Mortgage Bankers Association) in for another drop with a -6.5% figure with demand at its lowest in 22 years. We’ll get crucial pricing data tomorrow with CPI (Consumer Price Index) out of the Bureau of Labor Statistics, as well as preliminary consumer sentiment out of UoM (the University of Michigan).

Yields only crept higher in the bond market, and hence were also in for a climb with the 5Y on the verge of crossing into positive territory. Market pricing for the US Federal Reserve rate hikes fully priced in on 50bp for the next week and the meeting in July while majority pricing in the same amount by a higher margin for September. You can expect those likelihoods to change depending on tomorrow's CPI figures that could easily cause moves past key technical price levels depending on how much the results veer far from expectations.

Nasdaq technical analysis, overview, strategies, and levels

There wasn't a play on offer here with price action within (daily time frame) 1st levels (though levels with ongoing oscillations mean narrowing further and means a breakout when occurs could surprise). Yields are in for a climb again albeit slight and hence doing little to sway growth valuations significantly.

Intel was at the very bottom amongst the Nasdaq 100’s components following the Citi analyst warning (and hurting other chip makers plenty of whom are components of this index), while on the other end the minority finishing in the green was led by Pinduoduo and JD.com as Chinese stocks were in for another climb.

The recent moves have done little to shift the tech-heavy index’s technical overview, though the oscillations have tempted range-traders into considering reversal strategies which can only outperform so long as volatility doesn’t pick up, a tough task with what’s at stake tomorrow in fundamental terms.

IG client* and CoT** sentiment for Nasdaq

Nasdaq chart with retail and institutional sentiment

As for trader bias, it shifted in the Dow 30 from slight sell 53% yesterday to slight buy 54% as of this morning where range-trading has been a bit heavier. While here has opted to remain in majority buy territory and little changed since yesterday morning with 61% the latest reading, CoT speculators as per last Friday’s report are still majority buy but have dropped to a slight long 52% and not far off shifting to majority short.

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.