Nasdaq 100: Futures up after a red session, earnings from Apple next

FOMC dovish hold and mostly disappointing data

The Federal Open Market Committee (FOMC) opted to hold interest rates steady as anticipated, with a statement citing a "lack of further progress" on inflation. However, other aspects appeared dovish, especially following recent hotter pricing data. These include the announcement about the balance sheet runoff reduction starting in June, which is slightly larger than some estimates; Chairman Powell's statement that it’s "unlikely" the next rate move will be a hike; and a declaration of readiness to "prepared to respond" to "an unexpected weakening" in employment. Market pricing, according to CME's FedWatch, has now shifted, bringing a rate cut in September back into consideration by a slight majority.

Regarding economic data from the US, the ADP’s non-farm estimate for April exceeded expectations with a 192K print, but other indicators disappointed. These include, job openings from JOLTS for March coming in below forecasts and dropping to about 8.5m; a 0.2% contraction in construction spending for the same month; the ISM’s (Institute for Supply Management) manufacturing PMI (Purchasing Managers’ Index) missing expectations and dropping back into contraction with a 49.2 reading (new orders fell from 51.4 to 49.1 while prices paid rose from 55.8 to 60.9, which is not the narrative any sector would want to see); and a 2.3% drop in the weekly mortgage applications according to MBA.

We can anticipate the weekly claims, Challenger's job cuts, factory orders, and earnings from Apple, a Nasdaq 100 component and heavyweight. Tomorrow, services PMIs are due but not before the often market-impacting Non-Farm Payrolls.

Nasdaq technical analysis, overview, strategies, and levels

There are a couple key technical indicators on the daily time frame that are bearish, with price beneath all its main short-term daily moving averages, and a negative DMI (Directional Movement Index), but where the margin isn’t that large for the -DI over the +DI. The moves as of late have managed to offer some beyond shorter-term daily (and weekly) 1st levels. At times, this has to do with fundamental forces. Yesterday’s intraday highs managed to offer some for conformist buy-breakout strategies on the breach of Wednesday’s 1st Resistance level before it eventually held offering more to contrarian sell-after-reversals on the move back down.

IG client* and CoT** sentiment for the Nasdaq

As for sentiment, IG clients have raised their majority buy bias following the pullback in price to 56% from yesterday’s slight long 54%. It’s higher than that of CoT speculators who have opted to remain near the middle for a few weeks now, with last week’s report showing a drop in both long and short positioning.

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 6:30am 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.}