Nasdaq 100: limited losses ahead of pricing data

Limited losses, cautious Fed member speak, and disappointing data

Sector performance at the close was a mixed story. Communication and tech were at the very bottom, and while consumer discretionary wasn't too far off the top, the net result failed to give this tech-heavy index a positive finish. It lost more compared to both Dow 30 and S&P 500 in percentage terms, but the losses were still relatively limited.

As for Treasury yields, they finished the session lower, albeit contained on the further end, falling in real terms as breakeven inflation rates were little changed, and market pricing (CME's FedWatch) remained unchanged in terms of hold-hold-cut for the March-May-June FOMC (Federal Open Market Committee) meetings. Regarding Federal Reserve (Fed) members speaking, Williams mentioned "three rate cuts" this year as "a reasonable starting point" with "a ways to go" on inflation, Collins once more discussed the likeliness of easing policy "later this year," and Bostic did not declare victory on inflation, stating there's "still work to do."

As for the data, there was more to process, with preliminary Q4 GDP (Gross Domestic Product) slightly missing at 3.2%, weekly mortgage applications in retreat again, and the trade deficit for January worsening. The PCE (Personal Consumption Expenditures) price index is the big one on offer next, though there are plenty of other items to note both today and tomorrow, including more Fed members speaking. The partial government shutdown deadline is tomorrow, but early reports suggest that a deal has been reached to push out that deadline slightly.

Nasdaq technical analysis, overview, strategies, and levels

Price is hovering above its previous 1st Support level as of writing this morning, with prior moves that offered a bit for contrarian sell-breakouts. This only happened for a limited period; and only triggered cautious conformist buy, after significant reversals on the way back up, with little for them thus far. As for key technical indicators, a struggle on the daily time frame, with a couple still relatively positive, though yet to derail its ‘bull average’ technical overview.

IG client* and CoT** sentiment for the Nasdaq

Retail traders don’t mind a pullback in price, given they hold a majority short bias after yesterday’s lower close have fallen out of heavy sell territory from 67% to 64%, as of this morning. CoT speculators are an opposite majority buy, but have been reducing their bias as of late, even in weeks where there were price gains (it’s a similar story for the Dow 30, where traders are also both majority buying and pulling back).

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.}