The Dow hardly swayed following hawkish minutes out of the Fed
Technical overview in the daily time frame a ‘bear average’ struggling with downside follow-through, with retail trader bias still majority buy.
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Minutes out of the US Federal Reserve (Fed) released last night showed the Federal Open Market Committee wanted to show its resolve in the fight against inflation, otherwise worried over risks 'that elevated inflation could become entrenched', and where higher prices pressures persisting would mean 'an even more restrictive stance could be appropriate'.
When it comes to US economic data, job openings remained strong with a drop to 11.25m above roughly 11m estimates. This is fueling the wage spiral narrative given the opening-to-unemployed margin, while services PMI (Purchasing Managers Index) out of ISM (Institute for Supply Management) slowed to a better-than-expected 55.3 (but its employment component contracted at 47.4 and new orders slowed to 55.6, both below estimates). We’ve got a few items on offer this evening that includes Fed member speak and trade data before the closely watched Non-Farm Payrolls tomorrow.
Dow technical analysis, overview, strategies, and levels
It's been more consolidatory as of late with brief scares earlier this week, and yesterday's action failed to provide any for both conformist and contrarian strategies with prices well within 1st levels, tilting a key technical indicator to neutral in this time frame but failing to shift the bearish narrative both here and on the weekly time frame.
Energy underperformed as a sector and put component Chevron into the red and was beaten only by Walgreens, while on the other end, UnitedHealth and Cisco outperformed.
IG client* and CoT** sentiment for the Dow
Dow chart with retail and institutional sentiment
As for trader bias, retail sentiment is little changed since yesterday morning on the lack of a significant change in price, from majority buy 60% yesterday morning to 58%.
*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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