This is a huge week for some of the biggest sentiment stocks in the giant tech space. Facebook, Amazon and Google are all reporting. These companies make up a substantial part of earnings and will subsequently have a general impact, especially on the tech sentiment.
NASDAQ futures have done little over past 2-3 weeks. There is a positively sloping trend channel, but the index has remained in the 7800/8000 range.
Earning coming in over the coming 2 days, with FB kicking off today, will have a big impact, and we are actively watching the consolidation range. We are not getting excited before the range is broken, either way.
Overall sentiment is still very sceptical off this last move higher in markets, and media is full of bearish people talking their books. Latest report of Ray Dalio’s bearish bets having gone badly is part of the psychology here.
The “rational” mind is aware of the many risks brewing out there, but price action is still very much to the upside. Having huge “fundamental” views here is ok, but trading those views for the short term seems more or less lethal.
NASDAQ volatility is down along with other global vol indices. There has been a small pop higher lately, but seen over the longer term, the VXN is still trading relatively low.
Bearish fundamental views are better expressed via options here according to us, as the risk for a further melt up still prevails, especially given the fact so many “smart” guys are talking bearish outlooks only.
Source, charts by Tradingview